G.R. No. 197309 ; October 10, 2012
ACE NAVIGATION CO., INC., VELA INTERNATIONAL MARINE LTD., and/or RODOLFO PAMINTUAN, Petitioners, vs. TEODORICO FERNANDEZ, assisted by GLENITA FERNANDEZ, Respondent.

FACTS

Respondent Teodorico Fernandez, a seafarer, filed a complaint for disability benefits and other monetary claims against petitioners Ace Navigation Co., Inc., Vela International Marine Ltd., and/or Rodolfo Pamintuan before the National Labor Relations Commission (NLRC). The petitioners moved to dismiss the complaint, contending that the Labor Arbiter had no jurisdiction. They argued that under the parties’ Collective Bargaining Agreement (CBA), specifically its grievance machinery and mandatory voluntary arbitration provisions, exclusive jurisdiction over the dispute resided with the voluntary arbitrator, as reinforced by Section 29 of the POEA Standard Employment Contract (POEA-SEC).
Fernandez opposed the motion, asserting that his complaint involved a money claim falling under the original and exclusive jurisdiction of the Labor Arbiter pursuant to Section 10 of Republic Act No. 8042 (The Migrant Workers Act). The Labor Arbiter denied the motion to dismiss, a ruling affirmed by the NLRC, which also held the order was interlocutory and non-appealable. The Court of Appeals subsequently denied the petitioners’ Rule 65 petition, citing both procedural error in appealing an interlocutory order and a substantive finding that the CBA lacked unequivocal language submitting money claims like disability benefits to voluntary arbitration.

ISSUE

Whether the Labor Arbiter or the voluntary arbitration mechanism under the CBA has original and exclusive jurisdiction over the seafarer’s claim for disability benefits.

RULING

The Supreme Court ruled in favor of the petitioners and held that the voluntary arbitration procedure under the CBA governs. The Court clarified that while Labor Arbiters generally have original and exclusive jurisdiction over money claims under Article 217 of the Labor Code and Section 10 of R.A. No. 8042 , this jurisdiction is not absolute when a CBA exists. The law encourages voluntary arbitration for resolving labor disputes, including those otherwise cognizable by Labor Arbiters, provided the agreement to submit is clear.
The Court found that the parties’ CBA contained a definitive grievance procedure culminating in mandatory arbitration. Section 14.7(a) of the CBA stipulated that if the grievance committee failed to resolve a dispute, “either party may refer the case to a MANDATORY ARBITRATION COMMITTEE.” The Court interpreted “may” in this context as permissive only as to which party initiates the referral, but the referral itself to arbitration was compulsory once invoked, making the process mandatory. This constituted the requisite unequivocal agreement to submit disputes to voluntary arbitration. Consequently, the disability claim, arising from the employer-employee relationship defined by the CBA, must be referred to the contractual grievance and arbitration process. The Court set aside the CA’s decision and ordered the claim referred to the Grievance Resolution Committee and/or Mandatory Arbitration Committee under the CBA.