7K Corporation vs Eddie Albarico
G.R. No. 182295
June 26, 2013
DOCTRINE : Although the general rule under the Labor Code gives the labor arbiter exclusive
and original jurisdiction over termination disputes, it also recognizes exceptions. One of the
exceptions is provided in Article 262 of the Labor Code which provides “Jurisdiction over other
labor disputes. The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of
the parties, shall also hear and decide all other labor disputes including unfair labor practices and
bargaining deadlocks.”
FACTS:
Respondent Eddie Albarico was a regular employee of petitioner 7K Corporation, a
company selling water purifiers. He started working for the company in 1990 as a salesman and
was regularized thereafter. He was also promoted to senior sales representative and then to acting
team field supervisor and was even awarded as one of the company’s top water purifier specialist
distributors. On 1993, Albarico was terminated allegedly for his poor sales performance and his
abandonment of his employment. He then filed for money claims before the National
Conciliation and Mediation Board (NCMB), alleging that he was entitled to the payment of
separation pay and sales commission. While the same arbitration case was pending, Albarico
filed the same cause of action before the NLRC alleging that he was illegally dismissed. The
Labor Arbiter ruled in favor of the respondent. On appeal, the said decision was vacated due to
forum shopping on the part of the respondent. The NLRC decision stated that it was without
prejudice to the pending NCMB case.
On 2005, almost 12 years after the filing of the case, the parties manifested their
willingness to settle the case amicably. However, the petitioner was willing to pay only the
separation pay and sales commission according to the Submission Agreement dated 1993. The
NCMB voluntary arbitrator rendered a decision finding petitioner liable for illegal dismissal. It
was found that the termination was not proved to be reasonable as said claim was belied by the
promotions, increases in the salary and awards received by Albarico. There was also no
abandonment of employment as mere absence was not sufficient to evidence the same but it must
be accompanied by overt acts pointing to the fact that the worker did not want to work anymore,
which was not present in this case. Thus, it was ruled that the respondent was illegally dismissed
without due process.
With these, petitioner corporation appealed to the CA imputing that the voluntary
arbitrator exercised grave abuse of discretion amounting to lack or excess of jurisdiction in
deciding the case based on the finding of illegal dismissal, which subject matter was not
explicitly included in the Submission Agreement filed for arbitration and resolution. The CA
affirmed the decision of the voluntary arbitrator but eliminating the award on attorney’s fees.
The petitioner filed a motion for reconsideration which was denied as well. Hence, this petition.
ISSUE: Whether or not a voluntary arbitrator exceeded the extent of his jurisdiction upon
deciding on the issue of illegal dismissal, which subject matter was allegedly not contained in the
Submission Agreement.
RULING:
No. The voluntary arbitrator properly assumed jurisdiction to decide the issue of the
legality of the dismissal of respondent as well as the latter’s entitlement to backwages, even if
neither the legality nor the entitlement was expressly claimed in the Submission Agreement of
the parties.
Under Article 217 of the Labor Code, “except as otherwise provided under this Code, the
Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by the parties for decision without extension,
even in the absence of stenographic notes, the following cases involving all workers,…:
2.Termination Disputes.” Hence, although the general rule under the Labor Code gives the labor
arbiter exclusive and original jurisdiction over termination disputes, it also recognizes exceptions
like that stated under Art. 217 constituting that cases arising from the interpretation or
implementation of collective bargaining agreement and of company procedure/policies shall be
referred to the grievance machinery and voluntary arbitrator as may be provided in said
agreement; and under Article 262 of the Labor Code which states that the voluntary arbitrator,
upon agreement of the parties, shall also hear and decide all other labor disputes including unfair
labor practices and bargaining deadlocks.
Voluntary arbitrators may, by agreement of the parties, assume jurisdiction over a
termination dispute such as the present case, contrary to the assertion of petitioner. The issue of
separation pay in the herein case emanates from the allegation of illegal dismissal, hence, it is
necessarily - although not explicitly - included in the Submission Agreement between the parties,
then vesting the voluntary arbitrator the jurisdiction to decide the said issue. On the basis of the
decision in the case Sime Darby Pilipinas, Inc. v. Deputy Administrator Magsalin, the voluntary
arbitrator also has the authority to determine not only the issue of whether or not a performance
bonus was to be granted, but also the related question of the amount of the bonus, were it to be
granted. Hence, it has the right to decide over the amount of separation pay. Moreover, "since
arbitration is a final resort for the adjudication of disputes," the voluntary arbitrator in the present
case can assume that he has the necessary power to make a final settlement. Thus, the Court
ruled that the voluntary arbitrator correctly assumed jurisdiction over the issue of entitlement of
respondent Albarico to backwages on the basis of the former's finding of illegal dismissal.
Dispositive Portion: WHEREFORE, premises considered, the instant Petition is DENIED. The
18 September 2007 Decision and 17 March 2008 Resolution of the Court of Appeals in CA-G.R.
SP No. 92526, are hereby AFFIRMED.
