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[G.R. No. 138938.

October 24, 2000]


CELESTINO VIVIERO, petitioner,
LTD. respondents.

vs. COURT

OF

APPEALS,

HAMMONIA

MARINE

SERVICES,

and

HANSEATIC

SHIPPING

CO.,

DECISION
BELLOSILLO, J.:
CELESTINO VIVERO, in this petition for review, seeks the reversal of the Decision of the Court of Appeals of 26 May 1999 setting aside the
Decision of the National Labor Relations Commission of 28 May 1998 as well as its Resolution of 23 July 1998 denying his motion for its
reconsideration, and reinstating the decision of the Labor Arbiter of 21 January 1997.
Petitioner Vivero, a licensed seaman, is a member of the Associated Marine Officers and Seamen's Union of the Philippines (AMOSUP). The
Collective Bargaining Agreement entered into by AMOSUP and private respondents provides, among others ARTICLE XII
GRIEVANCE PROCEDURE
xxxx
Sec. 3. A dispute or grievance arising in connection with the terms and provisions of this Agreement shall be adjusted in accordance with the following
procedure:
1. Any seaman who feels that he has been unjustly treated or even subjected to an unfair consideration shall endeavor to have said grievance adjusted
by the designated representative of the unlicensed department abroad the vessel in the following manner:
A. Presentation of the complaint to his immediate superior.
B. Appeal to the head of the department in which the seaman involved shall be employed.
C. Appeal directly to the Master.
Sec. 4. If the grievance cannnot be resolved under the provision of Section 3, the decision of the Master shall govern at sea x x x x in foreign ports and
until the vessel arrives at a port where the Master shall refer such dispute to either the COMPANY or the UNION in order to resolve such dispute. It is
understood, however, if the dispute could not be resolved then both parties shall avail of the grievance procedure.
Sec. 5. In furtherance of the foregoing principle, there is hereby created a GRIEVANCE COMMITTEE to be composed of two COMPANY
REPRESENTATIVES to be designated by the COMPANY and two LABOR REPRESENTATIVES to be designated by the UNION.
Sec. 6. Any grievance, dispute or misunderstanding concerning any ruling, practice, wages or working conditions in the COMPANY, or any breach of the
Employment Contract, or any dispute arising from the meaning or the application of the provision of this Agreement or a claim of violation thereof or any
complaint that any such crewmembers may have against the COMPANY, as well as complaint which the COMPANY may have against such
crewmembers shall be brought to the attention of the GRIEVANCE COMMITTEE before either party takes any action, legal or otherwise.
Sec. 7. The COMMITTEE shall resolve any dispute within seven (7) days from and after the same is submitted to it for resolution and if the same cannot
be settled by the COMMITTEE or if the COMMITTEE fails to act on the dispute within the 7-day period herein provided, the same shall be referred to a
VOLUNTARY ARBITRATION COMMITTEE.
An "impartial arbitrator" will be appointed by mutual choice and consent of the UNION and the COMPANY who shall hear and decide the dispute or
issue presented to him and his decision shall be final and unappealable x x x x[1]
As found by the Labor Arbiter Complainant was hired by respondent as Chief Officer of the vessel "M.V. Sunny Prince" on 10 June 1994 under the terms and conditions, to wit:
Duration of Contract - - - - 10 months
Basic Monthly Salary - - - - US $1,100.00

Hours of Work - - - - 44 hrs./week


Overtime - - - - 495 lump O.T.
Vacation leave with pay - - - - US $220.00/mo.
On grounds of very poor performance and conduct, refusal to perform his job, refusal to report to the Captain or the vessels Engineers or cooperate with
other ship officers about the problem in cleaning the cargo holds or of the shipping pump and his dismal relations with the Captain of the vessel,
complainant was repatriated on 15 July 1994.
On 01 August 1994, complainant filed a complaint for illegal dismissal at Associated Marine Officers and Seamans Union of the Philippines (AMOSUP)
of which complainant was a member. Pursuant to Article XII of the Collective Bargaining Agreement, grievance proceedings were conducted; however,
parties failed to reach and settle the dispute amicably, thus, on 28 November 1994, complainant filed [a] complaint with the Philippine Overseas
Employment Administration (POEA).[2]
The law in force at the time petitioner filed his Complaint with the POEA was EO No. 247.[3]
While the case was pending before the POEA, private respondents filed a Motion to Dismiss on the ground that the POEA
had no jurisdiction over the case considering petitioner Vivero's failure to refer it to a Voluntary Arbitration Committee in accordance with the CBA
between the parties. Upon the enactment of RA 8042, the Migrant Workers and Overseas Filipinos Act of 1995, the case was transferred to the
Adjudication Branch of the National Labor Relations Commission.
On 21 January 1997 Labor Arbiter Jovencio Ll. Mayor Jr., on the basis of the pleadings and documents available on record, rendered a decision
dismissing the Complaint for want of jurisdiction.[4] According to the Labor Arbiter, since the CBA of the parties provided for the referral to a Voluntary
Arbitration Committee should the Grievance Committee fail to settle the dispute, and considering the mandate of Art. 261 of the Labor Code on the
original and exclusive jurisdiction of Voluntary Arbitrators, the Labor Arbiter clearly had no jurisdiction over the case. [5]
Petitioner (complainant before the Labor Arbiter) appealed the dismissal of his petition to the NLRC. On 28 May 1998 the NLRC set aside the
decision of the Labor Arbiter on the ground that the record was clear that petitioner had exhausted his remedy by submitting his case to the Grievance
Committee of AMOSUP. Considering however that he could not obtain any settlement he had to ventilate his case before the proper forum, i.e., the
Philippine Overseas Employment Administration.[6] The NLRC further held that the contested portion in the CBA providing for the intercession of a
Voluntary Arbitrator was not binding upon petitioner since both petitioner and private respondents had to agree voluntarily to submit the case before a
Voluntary Arbitrator or Panel of Voluntary Arbitrators. This would entail expenses as the Voluntary Arbitrator chosen by the parties had to be
paid. Inasmuch however as petitioner chose to file his Complaint originally with POEA, then the Labor Arbiter to whom the case was transferred would
have to take cognizance of the case.[7]
The NLRC then remanded the case to the Labor Arbiter for further proceedings. On 3 July 1998 respondents filed a Motion for
Reconsideration which was denied by the NLRC on 23 July 1998.
Thus, private respondents raised the case to the Court of Appeals contending that the provision in the CBA requiring a dispute which remained
unresolved by the Grievance Committee to be referred to a Voluntary Arbitration Committee, was mandatory in character in view of the CBA between the
parties. They stressed that "since it is a policy of the state to promote voluntary arbitration as a mode of settling labor disputes, it is clear that the public
respondent gravely abused its discretion in taking cognizance of a case which was still within the mantle of the Voluntary Arbitration Commitees
jurisdiction."[8]
On the other hand, petitioner argued (A)s strongly suggested by its very title, referral of cases of this nature to the Voluntary Arbitration Committee is voluntary in nature. Otherwise, the
committee would not have been called Voluntary Arbitration Committee but rather, a Compulsory Arbitration Committee. Moreover, if the referral of cases
of similar nature to the Voluntary Arbitration Committee would be deemed mandatory by virtue of the provisions in the CBA, the [NLRC] would then be
effectively deprived of its jurisdiction to try, hear and decide termination disputes, as provided for under Article 217 of the Labor Code. Lastly,
[respondents] ought to be deemed to have waived their right to question the procedure followed by [petitioner], considering that they have already filed
their Position Paper before belatedly filing a Motion toDismiss x x x x [9]
But the Court of Appeals ruled in favor of private respondents. It held that the CBA "is the law between the parties and compliance therewith is
mandated by the express policy of the law." [10] Hence, petitioner should have followed the provision in the CBA requiring the submission of the dispute to
the Voluntary Arbitration Committee once the Grievance Committee failed to settle the controversy.[11] According to the Court of Appeals, the parties did
not have the choice to "volunteer" to refer the dispute to the Voluntary Arbitrator or a Panel of Arbitrators when there was already an agreement requiring
them to do so. "Voluntary Arbitration" means that it is binding because of a prior agreement or contract, while "Compulsory Arbitration" is when the law
declares the dispute subject to arbitration, regardless of the consent or desire of the parties.[12]
The Court of Appeals further held that the Labor Code itself enumerates the original and exclusive jurisdiction of the Voluntary Arbitrator or Panel
of Voluntary Arbitrators, and prohibits the NLRC and the Regional Directors of the Department of Labor and Employment (DOLE) from entertaining
cases falling under the same. [13] Thus, the fact that private respondents filed their Position Paper first before filing their Motion to
Dismiss was immaterial and did not operate to confer jurisdiction upon the Labor Arbiter, following the well-settled rule that jurisdiction is determined by
law and not by consent or agreement of the parties or by estoppel.[14]

Finally, the appellate court ruled that a case falling under the jurisdiction of the Labor Arbiter as provided under Art. 217 of the Labor Code may be
lodged instead with a Voluntary Arbitrator because the law prefers, or gives primacy, to voluntary arbitration instead of compulsory arbitration.
[15]
Consequently, the contention that the NLRC would be deprived of its jurisdiction to try, hear and decide termination disputes under Art. 217 of the
Labor Code, should the instant dispute be referred to the Voluntary Arbitration Committee, is clearly bereft of merit. [16] Besides, the Voluntary Arbitrator,
whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency independent of, and apart from, the NLRC since his decisions are
not appealable to the latter.[17]
Celestino Vivero, in his petition for review assailing the Decision of the Court of Appeals, alleges that the appellate court committed grave abuse of
discretion in holding that a Voluntary Arbitrator or Panel of Voluntary Arbitrators, and not the Adjudication Branch of the NLRC, has jurisdiction over his
complaint for illegal dismissal. He claims that his complaint for illegal dismissal was undeniably a termination dispute and did not, in any way, involve an
"interpretation or implementation of collective bargaining agreement" or "interpretation" or "enforcement" of company personnel policies. Thus, it should
fall within the original and exclusive jurisdiction of the NLRC and its Labor Arbiter, and not with a Voluntary Arbitrator, in accordance with Art. 217 of the
Labor Code.
Private respondents, on the other hand, allege that the case is clearly one "involving the proper interpretation and implementation of
the Grievance Procedure found in the Collective Bargaining Agreement (CBA) between the parties"[18] because of petitioners allegation in his
claim/assistance request form submitted to the Union, to wit:
NATURE OF COMPLAINT
3. Illegal Dismissal - Reason: (1) That in this case it was the master of M.V. SUNNY PRINCE Capt. Andersen who created the trouble with physical injury
and stating false allegation; (2) That there was no proper procedure of grievance; (3) No proper notice of dismissal.
Is there a Notice of dismissal? _x_ Yes or ____ No
What date? 11 July 1994
Is there a Grievance Procedure observed? ____ Yes or _x_ No[19]
Private respondents further allege that the fact that petitioner sought the assistance of his Union evidently shows that he himself was convinced
that his Complaint was within the ambit of the jurisdiction of the grievance machinery and subsequently by a Panel of Voluntary Arbitrators as provided
for in their CBA, and as explicitly mandated by Art. 261 of the Labor Code.[20]
Thus, the issue is whether the NLRC is deprived of jurisdiction over illegal dismissal cases whenever a CBA provides for grievance machinery and
voluntary arbitration proceedings. Or, phrased in another way, does the dismissal of an employee constitute a "grievance between the parties," as
defined under the provisions of the CBA, and consequently, within the exclusive original jurisdiction of the Voluntary Arbitrators, thereby rendering the
NLRC without jurisdiction to decide the case?
On the original and exclusive jurisdiction of Labor Arbiters, Art. 217 of the Labor Code provides Art. 217. Jurisdiction of Labor Arbiters and the Commission. - (a) 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, whether agricultural or non-agricultural: (1) Unfair labor
practice cases; (2) Termination disputes; (3) If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of employment; (4) Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations; (5) Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and
lockouts; and, (6) Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employeremployee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation of collective bargaining agreements and those arising from the interpretation or enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be
provided in said agreements (emphasis supplied).
However, any or all of these cases may, by agreement of the parties, be submitted to a Voluntary Arbitrator or Panel of Voluntary Arbitrators for
adjudication. Articles 261 and 262 of the Labor Code provide Art. 261. Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators. - The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have
original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding
article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor
practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective
Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes, grievances
or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and
refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement.
Art. 262. 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 (emphasis supplied).
Private respondents attempt to justify the conferment of jurisdiction over the case on the Voluntary Arbitrator on the ground that the issue involves
the proper interpretation and implementation of the Grievance Procedure found in the CBA. They point out that when petitioner sought the assistance of
his Union to avail of the grievance machinery, he in effect submitted himself to the procedure set forth in the CBA regarding submission of unresolved
grievances to a Voluntary Arbitrator.
The argument is untenable. The case is primarily a termination dispute. It is clear from the claim/assistance request form submitted by petitioner to
AMOSUP that he was challenging the legality of his dismissal for lack of cause and lack of due process. The issue of whether there was proper
interpretation and implementation of the CBA provisions comes into play only because the grievance procedure provided for in the CBA was not
observed after he sought his Unions assistance in contesting his termination. Thus, the question to be resolved necessarily springs from the primary
issue of whether there was a valid termination; without this, then there would be no reason to invoke the need to interpret and implement the CBA
provisions properly.
In San Miguel Corp. v. National Labor Relations Commission [21] this Court held that the phrase "all other labor disputes" may include termination
disputes provided that the agreement between the Union and the Company states "in unequivocal language that [the parties] conform to the submission
of termination disputes and unfair labor practices to voluntary arbitration." [22] Ergo, it is not sufficient to merely say that parties to the CBA agree on the
principle that "all disputes" should first be submitted to a Voluntary Arbitrator. There is a need for an express stipulation in the CBA that illegal termination
disputes should be resolved by a Voluntary Arbitrator or Panel of Voluntary Arbitrators, since the same fall within a special class of disputes that are
generally within the exclusive original jurisdiction of Labor Arbiters by express provision of law. Absent such express stipulation, the phrase "all disputes"
should be construed as limited to the areas of conflict traditionally within the jurisdiction of Voluntary Arbitrators, i.e., disputes relating to contractinterpretation, contract-implementation, or interpretation or enforcement of company personnel policies. Illegal termination disputes - not falling within
any of these categories - should then be considered as a special area of interest governed by a specific provision of law.
In this case, however, while the parties did agree to make termination disputes the proper subject of voluntary arbitration, such submission
remains discretionary upon the parties. A perusal of the CBA provisions shows that Sec. 6, Art. XII (Grievance Procedure) of the CBA is the general
agreement of the parties to refer grievances, disputes or misunderstandings to a grievance committee, and henceforth, to a voluntary arbitration
committee. The requirement of specificity is fulfilled by Art. XVII (Job Security) where the parties agreed Sec. 1. Promotion, demotion, suspension, dismissal or disciplinary action of the seaman shall be left to the discretion of the Master, upon consultation
with the Company and notification to the Union. This notwithstanding, any and all disciplinary action taken on board the vessel shall be provided for in
Appendix B of this Agreement x x x x [23]
Sec. 4. x x x x Transfer, lay-off or discipline of seamen for incompetence, inefficiency, neglect of work, bad behavior, perpetration of crime, drunkenness,
insubordination, desertion, violation of x x x regulations of any port touched by the Companys vessel/s and other just and proper causes shall be at
Masters discretion x x x in the high seas or foreign ports. The Master shall refer the case/dispute upon reaching port and if not satisfactorily settled, the
case/dispute may be referred to the grievance machinery or procedure hereinafter provided (emphasis supplied).[24]
The use of the word "may" shows the intention of the parties to reserve the right to submit the illegal termination dispute to the jurisdiction of the
Labor Arbiter, rather than to a Voluntary Arbitrator. Petitioner validly exercised his option to submit his case to a Labor Arbiter when he filed
his Complaint before the proper government agency.
Private respondents invoke Navarro III v. Damasco[25] wherein the Court held that "it is the policy of the state to promote voluntary arbitration as a
mode of settling disputes."[26] It should be noted, however, that in Navarro III all the parties voluntarily submitted to the jurisdiction of the Voluntary
Arbitrator when they filed their respective position papers and submitted documentary evidence before him. Furthermore, they manifested during the
initial conference that they were not questioning the authority of the Voluntary Arbitrator. [27] In the case at bar, the dispute was never brought to a
Voluntary Arbitrator for resolution; in fact, petitioner precisely requested the Court to recognize the jurisdiction of the Labor Arbiter over the case. The
Court had held in San Miguel Corp. v. NLRC [28] that neither officials nor tribunals can assume jurisdiction in the absence of an express legal
conferment. In the same manner, petitioner cannot arrogate into the powers of Voluntary Arbitrators the original and exclusive jurisdiction of Labor
Arbiters over unfair labor practices, termination disputes, and claims for damages, in the absence of an express agreement between the parties in order
for Art. 262 of the Labor Code to apply in the case at bar. In other words, the Court of Appeals is correct in holding that Voluntary Arbitration is mandatory
in character if there is a specific agreement between the parties to that effect. It must be stressed however that, in the case at bar, the use of the word
"may" shows the intention of the parties to reserve the right of recourse to Labor Arbiters.
The CBA clarifies the proper procedure to be followed in situations where the parties expressly stipulate to submit termination disputes to the
jurisdiction of a Voluntary Arbitrator or Panel of Voluntary Arbitrators. For when the parties have validly agreed on a procedure for resolving grievances
and to submit a dispute to voluntary arbitration then that procedure should be strictly observed. Non-compliance therewith cannot be excused, as
petitioner suggests, by the fact that he is not well-versed with the "fine prints" of the CBA. It was his responsibility to find out, through his Union, what the
provisions of the CBA were and how they could affect his rights. As provided in Art. 241, par. (p), of the Labor Code (p) It shall be the duty of any labor organization and its officers to inform its members on the provisions of its constitution and by-laws, collective
bargaining agreement, the prevailing labor relations system and all their rights and obligations under existing labor laws.

In fact, any violation of the rights and conditions of union membership is a "ground for cancellation of union registration or expulsion of officer from
office, whichever is appropriate. At least thirty percent (30%) of all the members of a union or any member or members especially concerned may report
such violation to the Bureau [of Labor Relations] x x x x"[29]
It may be observed that under Policy Instruction No. 56 of the Secretary of Labor, dated 6 April 1993, "Clarifying the Jurisdiction Between
Voluntary Arbitrators and Labor Arbiters Over Termination Cases and Providing Guidelines for the Referral of Said Cases Originally Filed with the NLRC
to the NCMB," termination cases arising in or resulting from the interpretation and implementation of collective bargaining agreements and interpretation
and enforcement of company personnel policies which were initially processed at the various steps of the plant-level Grievance Procedures under the
parties' collective bargaining agreements fall within the original and exclusive jurisdiction of the voluntary arbitrator pursuant to Art. 217 (c) and Art. 261
of the Labor Code; and, if filed before the Labor Arbiter, these cases shall be dismissed by the Labor Arbiter for lack of jurisdiction and referred to the
concerned NCMB Regional Branch for appropriate action towards an expeditious selection by the parties of a Voluntary Arbitrator or Panel of Arbitrators
based on the procedures agreed upon in the CBA.
As earlier stated, the instant case is a termination dispute falling under the original and exclusive jurisdiction of the Labor Arbiter, and does not
specifically involve the application, implementation or enforcement of company personnel policies contemplated in Policy Instruction No.
56. Consequently, Policy Instruction No. 56 does not apply in the case at bar. In any case, private respondents never invoked the application of Policy
Instruction No. 56 in their Position Papers, neither did they raise the question in their Motion to Dismiss which they filed nine (9) months after the filing of
their Position Papers. At this late stage of the proceedings, it would not serve the ends of justice if this case is referred back to a Voluntary Arbitrator
considering that both the AMOSUP and private respondents have submitted to the jurisdiction of the Labor Arbiter by filing their respective Position
Papers and ignoring the grievance procedure set forth in their CBA.
After the grievance proceedings have failed to bring about a resolution, AMOSUP, as agent of petitioner, should have informed him of his option to
settle the case through voluntary arbitration. Private respondents, on their part, should have timely invoked the provision of their CBA requiring the
referral of their unresolved disputes to a Voluntary Arbitrator once it became apparent that the grievance machinery failed to resolve it prior to the filing of
the case before the proper tribunal. The private respondents should not have waited for nine (9) months from the filing of their Position Paper with the
POEA before it moved to dismiss the case purportedly for lack of jurisdiction. As it is, private respondents are deemed to have waived their right to
question the procedure followed by petitioner, assuming that they have the right to do so. Under their CBA, both Union and respondent companies are
responsible for selecting an impartial arbitrator or for convening an arbitration committee; [30] yet, it is apparent that neither made a move towards this
end. Consequently, petitioner should not be deprived of his legitimate recourse because of the refusal of both Union and respondent companies to follow
the grievance procedure.
WHEREFORE, the Decision of the Court of Appeals is SET ASIDE and the case is remanded to the Labor Arbiter to dispose of the case with
dispatch until terminated considering the undue delay already incurred.
SO ORDERED.

[G.R. No. 142244. November 18, 2002]


ATLAS FARMS, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, JAIME O. DELA PEA and MARCIAL I. ABION, respondents.
DECISION
QUISUMBING, J.:
Petitioner seeks the reversal of the decision [1] dated January 10, 2000 of the Court of Appeals in CA-G.R. SP No. 52780, dismissing its petition
for certiorari against the NLRC, as well as the resolution[2] dated February 24, 2000, denying its motion for reconsideration.
The antecedent facts of the case, as found by the Court of Appeals,[3] are as follows:
Private respondent Jaime O. dela Pea was employed as a veterinary aide by petitioner in December 1975. He was among several employees
terminated in July 1989. On July 8, 1989, he was re-hired by petitioner and given the additional job of feedmill operator. He was instructed to train
selected workers to operate the feedmill.
On March 13, 1993,[4] Pea was allegedly caught urinating and defecating on company premises not intended for the purpose. The farm manager
of petitioner issued a formal notice directing him to explain within 24 hours why disciplinary action should not be taken against him for violating company

rules and regulations. Pea refused, however, to receive the formal notice. He never bothered to explain, either verbally or in writing, according to
petitioner. Thus, on March 20, 1993, a notice of termination with payment of his monetary benefits was sent to him. He duly acknowledged receipt of his
separation pay of P13,918.67.
From the start of his employment on July 8, 1989, until his termination on March 20, 1993, Pea had worked for seven days a week, including
holidays, without overtime, holiday, rest day pay and service incentive leave. At the time of his dismissal from employment, he was receiving P180 pesos
daily wage, or an average monthly salary of P5,402.
Co-respondent Marcial I. Abion[5] was a carpenter/mason and a maintenance man whose employment by petitioner commenced on October 8,
1990. Allegedly, he caused the clogging of the fishpond drainage resulting in damages worth several hundred thousand pesos when he improperly
disposed of the cut grass and other waste materials into the ponds drainage system. Petitioner sent a written notice to Abion, requiring him to explain
what happened, otherwise, disciplinary action would be taken against him. He refused to receive the notice and give an explanation, according to
petitioner. Consequently, the company terminated his services on October 27, 1992. He acknowledged receipt of a written notice of dismissal, with his
separation pay.
Like Pea, Abion worked seven days a week, including holidays, without holiday pay, rest day pay, service incentive leave pay and night shift
differential pay. When terminated on October 27, 1992, Abion was receiving a monthly salary of P4,500.
Pea and Abion filed separate complaints for illegal dismissal that were later consolidated. Both claimed that their termination from service was due
to petitioners suspicion that they were the leaders in a plan to form a union to compete and replace the existing management-dominated union.
On November 9, 1993, the labor arbiter dismissed their complaints on the ground that the grievance machinery in the collective bargaining
agreement (CBA) had not yet been exhausted. Private respondents availed of the grievance process, but later on refiled the case before the NLRC in
Region IV. They alleged lack of sympathy on petitioners part to engage in conciliation proceedings.
Their cases were consolidated in the NLRC. At the initial mandatory conference, petitioner filed a motion to dismiss, on the ground of lack of
jurisdiction, alleging private respondents themselves admitted that they were members of the employees union with which petitioner had an existing
CBA. This being the case, according to petitioner, jurisdiction over the case belonged to the grievance machinery and thereafter the voluntary arbitrator,
as provided in the CBA.
In a decision dated January 30, 1996, the labor arbiter dismissed the complaint for lack of merit, finding that the case was one of illegal dismissal
and did not involve the interpretation or implementation of any CBA provision. He stated that Article 217 (c) of the Labor Code [6] was inapplicable to the
case. Further, the labor arbiter found that although both complainants did not substantiate their claims of illegal dismissal, there was proof that private
respondents voluntarily accepted their separation pay and petitioners financial assistance.
Thus, private respondents brought the case to the NLRC, which reversed the labor arbiters decision. Dissatisfied with the NLRC ruling, petitioner
went to the Court of Appeals by way of a petition for review on certiorari under Rule 65, seeking reinstatement of the labor arbiters decision. The
appellate court denied the petition and affirmed the NLRC resolution with some modifications, thus:
WHEREFORE, the petition is DENIED. The resolution in NLRC CA No. 010520-96 is AFFIRMED with the following modifications:
1) The private respondents can not be reinstated, due to their acceptance of the separation pay offered by the petitioner;
2) The private respondents are entitled to their full back wages; and,
3) The amount of the separation pay received by private respondents from petitioner shall not be deducted from their full back wages.
Costs against petitioner.
SO ORDERED.[7]
Petitioner forthwith filed its motion for reconsideration, which was denied in a resolution dated February 24, 2000, which reads:
Acting on the Motion for Reconsideration filed by petitioner[s] which drew an opposition from private respondents, the Court resolved to DENY the
aforesaid motion for reconsideration, as the issues raised therein have been passed upon by the Court in its questioned decision and no substantial
arguments were presented to warrant its reversal, let alone modification.
SO ORDERED.[8]
In this petition now before us, petitioner alleges that the appellate court erred in:
I. DENYING THE PETITION FOR CERTIORARI AND IN EFFECT AFFIRMING THE RULINGS OF THE PUBLIC RESPONDENT NLRC
THAT THE PRIVATE RESPONDENTS WERE ILLEGALLY DISMISSED;

II. RULING THAT THE PRIVATE RESPONDENTS ARE ENTITLED TO SEPARATION PAY AND FULL BACKWAGES;
III. RULING THAT PETITIONER IS LIABLE FOR COSTS OF SUIT.[9]
Petitioner contends that the dismissal of private respondents was for a just and valid cause, pursuant to the provisions of the companys rules and
regulations. It also alleges lack of jurisdiction on the part of the labor arbiter, claiming that the cases should have been resolved through the grievance
machinery, and eventually referred to voluntary arbitration, as prescribed in the CBA.
For their part, private respondents contend that they were illegally dismissed from employment because management discovered that they
intended to form another union, and because they were vocal in asserting their rights. In any case, according to private respondents, the petition
involves factual issues that cannot be properly raised in a petition for review on certiorari under Rule 45 of the Revised Rules of Court. [10]
In fine, there are three issues to be resolved: 1) whether private respondents were legally and validly dismissed; 2) whether the labor arbiter and
the NLRC had jurisdiction to decide complaints for illegal dismissal; and 3) whether petitioner is liable for costs of the suit.
The first issue primarily involves questions of fact, which can serve as basis for the conclusion that private respondents were legally and validly
dismissed. The burden of proving that the dismissal of private respondents was legal and valid falls upon petitioner. The NLRC found that petitioner
failed to substantiate its claim that both private respondents committed certain acts that violated company rules and regulations, [11] hence we find no
factual basis to say that private respondents dismissal was in order. We see no compelling reason to deviate from the NLRC ruling that their dismissal
was illegal, absent a showing that it reached its conclusion arbitrarily. [12] Moreover, factual findings of agencies exercising quasi-judicial functions are
accorded not only respect but even finality, aside from the consideration here that this Court is not a trier of facts. [13]
Anent the second issue, Article 217 of the Labor Code provides that labor arbiters have original and exclusive jurisdiction over termination
disputes. A possible exception is provided in Article 261 of the Labor Code, which provides thatThe Voluntary Arbitrator or panel of voluntary arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances
arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of
company personnel policies referred to in the immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those
which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining
Agreement.For purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and or malicious refusal to comply with
the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes, grievances
or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and
refer the same to the grievance Machinery or Arbitration provided in the Collective Bargaining Agreement.
But as held in Vivero vs. CA,[14] petitioner cannot arrogate into the powers of Voluntary Arbitrators the original and exclusive jurisdiction of Labor
Arbiters over unfair labor practices, termination disputes, and claims for damages, in the absence of an express agreement between the parties in order
for Article 262 of the Labor Code [Jurisdiction over other labor disputes] to apply in the case at bar.
Moreover, per Justice Bellosillo:
It may be observed that under Policy Instruction No. 56 of the Secretary of Labor, dated 6 April 1993, Clarifying the Jurisdiction Between Voluntary
Arbitrators and Labor Arbiters Over Termination Cases and Providing Guidelines for the Referral of Said Cases Originally Filed with the NLRC to the
NCMB, termination cases arising in or resulting from the interpretation and implementation of collective bargaining agreements and interpretation and
enforcement of company personnel policies which were initially processed at the various steps of the plant-level Grievance Procedures under the parties
collective bargaining agreements fall within the original and exclusive jurisdiction of the voluntary arbitrator pursuant to Art. 217 (c) and Art. 261 of the
Labor Code; and, if filed before the Labor Arbiter, these cases shall be dismissed by the Labor Arbiter for lack of jurisdiction and referred to the
concerned NCMB Regional Branch for appropriate action towards an expeditious selection by the parties of a Voluntary Arbitrator or Panel of Arbitrators
based on the procedures agreed upon in the CBA.
As earlier stated, the instant case is a termination dispute falling under the original and exclusive jurisdiction of the Labor Arbiter, and does not
specifically involve the application, implementation or enforcement of company personnel policies contemplated in Policy Instruction No.
56. Consequently, Policy Instruction No. 56 does not apply in the case at bar.[15] x x x
Records show, however, that private respondents sought without success to avail of the grievance procedure in their CBA. [16] On this point,
petitioner maintains that by so doing, private respondents recognized that their cases still fell under the grievance machinery. According to petitioner,
without having exhausted said machinery, the private respondents filed their action before the NLRC, in a clear act of forum-shopping. [17] However, it is
worth pointing out that private respondents went to the NLRC only after the labor arbiter dismissed their original complaint for illegal dismissal. Under
these circumstances private respondents had to find another avenue for redress. We agree with the NLRC that it was petitioner who failed to show proof
that it took steps to convene the grievance machinery after the labor arbiter first dismissed the complaints for illegal dismissal and directed the parties to
avail of the grievance procedure under Article VII of the existing CBA. They could not now be faulted for attempting to find an impartial forum, after
petitioner failed to listen to them and after the intercession of the labor arbiter proved futile. The NLRC had aptly concluded in part that private
respondents had already exhausted the remedies under the grievance procedure. [18] It erred only in finding that their cause of action was ripe for
arbitration.

In the case of Maneja vs. NLRC,[19] we held that the dismissal case does not fall within the phrase grievances arising from the interpretation or
implementation of the collective bargaining agreement and those arising from the interpretation or enforcement of company personnel policies.
In Maneja, the hotel employee was dismissed without hearing. We ruled that her dismissal was unjustified, and her right to due process was violated,
absent the twin requirements of notice and hearing. We also held that the labor arbiter had original and exclusive jurisdiction over the termination case,
and that it was error to give the voluntary arbitrator jurisdiction over the illegal dismissal case.
In Vivero vs. CA,[20] private respondents attempted to justify the jurisdiction of the voluntary arbitrator over a termination dispute alleging that the
issue involved the interpretation and implementation of the grievance procedure in the CBA. There, we held that since what was challenged was the
legality of the employees dismissal for lack of cause and lack of due process, the case was primarily a termination dispute. The issue of whether there
was proper interpretation and implementation of the CBA provisions came into play only because the grievance procedure in the CBA was not observed,
after he sought his unions assistance. Since the real issue then was whether there was a valid termination, there was no reason to invoke the need to
interpret nor question an implementation of any CBA provision.
One significant fact in the present petition also needs stressing. Pursuant to Article 260[21] of the Labor Code, the parties to a CBA shall name or
designate their respective representatives to the grievance machinery and if the grievance is unsettled in that level, it shall automatically be referred to
the voluntary arbitrators designated in advance by the parties to a CBA. Consequently only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators. In these termination cases of private respondents, the union had no participation, it having
failed to object to the dismissal of the employees concerned by the petitioner. It is obvious that arbitration without the unions active participation on
behalf of the dismissed employees would be pointless, or even prejudicial to their cause.
Coming to the merits of the petition, the NLRC found that petitioner did not comply with the requirements of a valid dismissal. For a dismissal to be
valid, the employer must show that: (1) the employee was accorded due process, and (2) the dismissal must be for any of the valid causes provided for
by law.[22] No evidence was shown that private respondents refused, as alleged, to receive the notices requiring them to show cause why no disciplinary
action should be taken against them. Without proof of notice, private respondents who were subsequently dismissed without hearing were also deprived
of a chance to air their side at the level of the grievance machinery. Given the fact of dismissal, it can be said that the cases were effectively removed
from the jurisdiction of the voluntary arbitrator, thus placing them within the jurisdiction of the labor arbiter. Where the dispute is just in the interpretation,
implementation or enforcement stage, it may be referred to the grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where
there was already actual termination, with alleged violation of the employees rights, it is already cognizable by the labor arbiter.[23]
In sum, we conclude that the labor arbiter and then the NLRC had jurisdiction over the cases involving private respondents dismissal, and no error
was committed by the appellate court in upholding their assumption of jurisdiction.
However, we find that a modification of the monetary awards is in order. As a consequence of their illegal dismissal, private respondents are
entitled to reinstatement to their former positions. But since reinstatement is no longer feasible because petitioner had already closed its shop,
separation pay in lieu of reinstatement shall be awarded. [24] A terminated employees receipt of his separation pay and other monetary benefits does not
preclude reinstatement or full benefits under the law, should reinstatement be no longer possible. [25] As held in Cario vs. ACCFA:[26]
Acceptance of those benefits would not amount to estoppel. The reason is plain. Employer and employee, obviously, do not stand on the same
footing. The employer drove the employee to the wall. The latter must have to get hold of the money. Because out of job, he had to face the harsh
necessities of life. He thus found himself in no position to resist money proffered. His, then, is a case of adherence, not of choice. One thing sure,
however, is that petitioners did not relent their claim. They pressed it. They are deemed not to have waived their rights. Renuntiato non praesumitur.
Conformably, private respondents are entitled to separation pay equivalent to one months salary for every year of service, in lieu of reinstatement.
As regards the award of damages, in order not to further delay the disposition of this case, we find it necessary to expressly set forth the extent of the
backwages as awarded by the appellate court. Pursuant to R.A. 6715, as amended, private respondents shall be entitled to full backwages computed
from the time of their illegal dismissal up to the date of promulgation of this decision without qualification, considering that reinstatement is no longer
practicable under the circumstances.[28]
[27]

Having found private respondents dismissal to be illegal, and the labor arbiter and the NLRC duly vested with jurisdiction to hear and decide their
cases, we agree with the appellate court that petitioner should pay the costs of suit.
WHEREFORE, the petition is DENIED for lack of merit. The decision of the Court of Appeals in CA-G.R. SP No. 52780 is AFFIRMED with the
MODIFICATION that petitioner is ordered to pay private respondents (a) separation pay, in lieu of their reinstatement, equivalent to one months salary
for every year of service, (b) full backwages from the date of their dismissal up to the date of the promulgation of this decision, together with (c) the costs
of suit.
SO ORDERED.