Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=81865:182295&catid=1571&Itemid=566
Timestamp: 2019-04-23 10:08:02+00:00

Document:
G.R. No. 182295, June 26, 2013 - 7K CORPORATION, Petitioner, v. EDDIE ALBARICO, Respondent.
7K CORPORATION, Petitioner, v. EDDIE ALBARICO, Respondent.
On appeal by petitioner, the labor arbiter’s Decision was vacated by the NLRC for forum shopping on the part of respondent Albarico, because the NCMB arbitration case was still pending.9 The NLRC Decision, which explicitly stated that the dismissal was without prejudice to the pending NCMB arbitration case,10 became final after no appeal was taken.
The factual findings of the voluntary arbitrator, as well as of the CA, are not clear on what happened afterwards. Even the records are bereft of sufficient information.
On 18 November 2005, the NCMB voluntary arbitrator rendered a Decision finding petitioner corporation liable for illegal dismissal.15 The termination of respondent Albarico, by reason of alleged poor performance, was found invalid.16 The arbitrator explained that the promotions, increases in salary, and awards received by respondent belied the claim that the latter was performing poorly.17 It was also found that Albarico could not have abandoned his job, as the abandonment should have been clearly shown. Mere absence was not sufficient, according to the arbitrator, but must have been accompanied by overt acts pointing to the fact that the employee did not want to work anymore. It was noted that, in the present case, the immediate filing of a complaint for illegal dismissal against the employer, with a prayer for reinstatement, showed that the employee was not abandoning his work. The voluntary arbitrator also found that Albarico was dismissed from his work without due process.
However, it was found that reinstatement was no longer possible because of the strained relationship of the parties.18 Thus, in lieu of reinstatement, the voluntary arbitrator ordered the corporation to pay separation pay for two years at P4,456 for each year, or a total amount of P8,912.
Petitioner corporation subsequently appealed to the CA, imputing to the voluntary arbitrator grave abuse of discretion amounting to lack or excess of jurisdiction for awarding backwages and attorney’s fees to respondent Albarico based on the former’s finding of illegal dismissal.21 The arbitrator contended that the issue of the legality of dismissal was not explicitly included in the Submission Agreement dated 19 April 1993 filed for voluntary arbitration and resolution. It prayed that the said awards be set aside, and that only separation pay of P8,912.00 and sales commission of P4,787.60 be awarded.
The issue before the Court is whether the CA committed reversible error in finding that 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 expressedly claimed in the Submission Agreement of the parties.
The Petition is denied for being devoid of merit.
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
A. Art. 217. Jurisdiction of Labor Arbiters . . .
(c) Cases arising from the interpretation or implementation of collective bargaining agreement and those arising from the interpretation or enforcement of company procedure/policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitrator as may be provided in said agreement.
From the above discussion, it is clear that 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 that they may not.
We now resolve the main issue. Petitioner argues that, assuming that the voluntary arbitrator has jurisdiction over the present termination dispute, the latter should have limited his decision to the issue contained in the Submission Agreement of the parties – the issue of whether respondent Albarico was entitled to separation pay and to the sales commission the latter earned before being terminated.27 Petitioner asserts that under Article 262 of the Labor Code, the jurisdiction of a voluntary arbitrator is strictly limited to the issues that the parties agree to submit. Thus, it contends that the voluntary arbitrator exceeded his jurisdiction when he resolved the issues of the legality of the dismissal of respondent and the latter’s entitlement to backwages on the basis of a finding of illegal dismissal.
According to petitioner, the CA wrongly concluded that the issue of respondent’s entitlement to separation pay was necessarily based on his allegation of illegal dismissal, thereby making the issue of the legality of his dismissal implicitly submitted to the voluntary arbitrator for resolution.28 Petitioner argues that this was an erroneous conclusion, because separation pay may in fact be awarded even in circumstances in which there is no illegal dismissal.
We rule that although petitioner correctly contends that separation pay may in fact be awarded for reasons other than illegal dismissal, the circumstances of the instant case lead to no other conclusion than that the claim of respondent Albarico for separation pay was premised on his allegation of illegal dismissal. Thus, the voluntary arbitrator properly assumed jurisdiction over the issue of the legality of his dismissal.
The above circumstances, however, do not obtain in the present case. There is no claim that the issue of entitlement to separation pay is being resolved in the context of any authorized cause of termination undertaken by petitioner corporation. Neither is there any allegation that a consideration of social justice is being resolved here. In fact, even in instances in which separation pay is awarded in consideration of social justice, the issue of the validity of the dismissal still needs to be resolved first. Only when there is already a finding of a valid dismissal for a just cause does the court then award separation pay for reason of social justice. The other circumstances when separation pay may be awarded are not present in this case.
The foregoing findings indisputably prove that the issue of separation pay emanates solely from respondent’s allegation of illegal dismissal. In fact, petitioner itself acknowledged the issue of illegal dismissal in its position paper submitted to the NCMB.
Moreover, we note that even the NLRC was of the understanding that the NCMB arbitration case sought to resolve the issue of the legality of the dismissal of the respondent. In fact, the identity of the issue of the legality of his dismissal, which was previously submitted to the NCMB, and later submitted to the NLRC, was the basis of the latter’s finding of forum shopping and the consequent dismissal of the case before it. In fact, petitioner also implicitly acknowledged this when it filed before the NLRC its Motion to Dismiss respondent’s Complaint on the ground of forum shopping. Thus, it is now estopped from claiming that the issue before the NCMB does not include the issue of the legality of the dismissal of respondent. Besides, there has to be a reason for deciding the issue of respondent’s entitlement to separation pay. To think otherwise would lead to absurdity, because the voluntary arbitrator would then be deciding that issue in a vacuum. The arbitrator would have no basis whatsoever for saying that Albarico was entitled to separation pay or not if the issue of the legality of respondent’s dismissal was not resolve first.
Hence, the voluntary arbitrator correctly assumed that the core issue behind the issue of separation pay is the legality of the dismissal of respondent. Moreover, we have ruled in Sime Darby Pilipinas, Inc. v. Deputy Administrator Magsalin33 that a voluntary arbitrator has plenary jurisdiction and authority to interpret an agreement to arbitrate and to determine the scope of his own authority when the said agreement is vague — subject only, in a proper case, to the certiorari jurisdiction of this Court.
Having established that the issue of the legality of dismissal of Albarico was in fact necessarily – albeit not explicitly – included in the Submission Agreement signed by the parties, this Court rules that the voluntary arbitrator rightly assumed jurisdiction to decide the said issue.
In Sime Darby we ruled that although the specific issue presented by the parties to the voluntary arbitrator was only “the issue of performance bonus,” the latter had 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. We explained that there was no indication at all that the parties to the arbitration agreement had regarded “the issue of performance bonus” as a two-tiered issue, of which only one aspect was being submitted to arbitration. Thus, we held that the failure of the parties to limit the issues specifically to that which was stated allowed the arbitrator to assume jurisdiction over the related issue.
Similarly, in the present case, there is no indication that the issue of illegal dismissal should be treated as a two-tiered issue whereupon entitlement to backwages must be determined separately. Besides, “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.35 Thus, we rule 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.
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.
35Ludo v. Saornido, 443 Phil. 554 (2003).

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