GRIEVANCE

MACHINERY AND
VOLUNTARY
ARBITRATION
 VOLUNTARY
ARBITRATION

CHAPTER
XXXI
Title VII-A
Grievance Machinery and
Voluntary Arbitration
LEARNING OUTCOMES
At the end of this module, students are expected to:
1. Explain what is “voluntary” about voluntary arbitration?
2. Determine what disputes have to be brought to voluntary arbitration.
3. Discuss who can be voluntary arbitrators.
4. Display competence in resolving issues concerning appeal from a
voluntary arbitrator’s decision after familiarizing the rules on to whom
and when to appeal?
 KNOW FIRST
THE LAW
(LEGAL
BASIS)
Article 273. Grievance Machinery
and Voluntary Arbitration

r y w ell]
stand ve
d u n der
an
[Read
ART. 273. GRIEVANCE MACHINERY AND
VOLUNTARY ARBITRATION.
The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the
mutual observance of its terms and conditions. They shall establish a machinery for the adjustment
and resolution of grievances arising from the interpretation or implementation of their
Collective Bargaining Agreement and those arising from the interpretation or enforcement of
company personnel policies.
All grievances submitted to the grievance machinery which are not settled within seven (7) calendar
days from the date of its submission shall automatically be referred to voluntary arbitration prescribed
in the Collective Bargaining Agreement.
For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance
a Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a procedure for
the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing
of qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a
Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary
Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure
agreed upon in the Collective Bargaining Agreement, which shall act with the same force and effect
as if the Arbitrator or panel of Arbitrators has been selected by the parties as described above.
 ic s ]
to Bas
ac k
[B
IMPORTANT NOTES TO ALL
EMPLOYERS AND MANAGERS
 ic s ]
B a s
ck to CONTRACT AS LAW
[Ba

•The provisions of the collective bargaining agreement must

be respected since its terms and conditions constitute the
“law between the parties.”
CONTRACT AS LAW
•Case in Point#1: Roche [Philippines], et. al. vs. NLRC,
G.R. No. 83335, October 5, 1989
Those who are entitled to its benefits can demand fulfillment of an
obligation imposed by the contract, otherwise, the aggrieved party
has the right to seek redress.
CONTRACT AS LAW
•Case in Point#2: Liberation Steamshop Co., Inc. vs. CIR,
G.R. No. L-25389, June 27, 1968
The rule is that the law forms part of, and is read into, every contract, unless
clearly excluded from it in those cases where such exclusion is allowed. Thus,
the fact that a CBA does not contain any provision on the payment of
accumulated leaves does not bar the employees’ claim for payment of unused
leave.
CHAPTER 2- Human Relations [R.A. No. 386]
•Article 19.
“Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith.”
 Pick ‘n’ Pay
Easy 10
1. ______________ is system whereby the parties agree to
refer their dispute to an impartial third person for a final and
binding resolution.
A. Conciliation
B. Mediation
C. Voluntary Arbitration
D. Compulsory Arbitration
E. Negotiation
F. Litigation
MEANING OF VOLUNTARY ARBITRATION
Voluntary arbitration is system whereby the parties
agree to refer their dispute to an impartial third person
called voluntary arbitrator for a final and binding
resolution. It differs from compulsory arbitration in the
sense that in compulsory arbitration, the third party is
appointed by the government.
 TRUE OR FALSE

All grievances not settled at the

grievance machinery are subject to
compulsory arbitration.
MATTERS SUBJECT TO VOLUNTARY
ARBITRATION
All grievances not settled at the grievance machinery
are subject to voluntary arbitration.
 Pick ‘n’ Pay
Average 10
2. ____________ is a dispute or controversy between employer and the
collective bargaining agent, individual employee or group of
employees, arising from interpretation or implementation of the
Collective Bargaining Agreement (CBA) or interpretation or
enforcement of company personnel policies.
A. Grievance
B. Strike
C. Picket
D. Lockout
E. Legal case in court
What is grievance?
Grievance is a dispute or controversy between
employer and the collective bargaining agent,
individual employee or group of employees, arising
from interpretation or implementation of the Collective
Bargaining Agreement (CBA) or interpretation or
enforcement of company personnel policies.
GRIEVANCE DEFINED
•NCMB, Primer on Grievance Settlement and Voluntary
Arbitration, 1990, p. 3
A grievance is defined as “any question by either the employer or the union
regarding the interpretation or application of the collective bargaining
agreement or company personnel policies or any claim by either party that the
other party is violating any provision of the CBA or company personnel
policies.”
GRIEVANCES THAT ARE COGNIZABLE BY THE
GRIEVANCE MACHINERY
Only grievances arising from the interpretation or
implementation of their CBA and those arising from the
interpretation or enforcement of company personnel
policies are cognizable by the grievance machinery.
SIMPLE VIOLATIONS OF CBA NOW TREATED
AS ORDINARY GRIEVANCE
Violations of a CBA (except those which are gross in
character), are now considered as ordinary grievances
to be resolved under grievance machinery of the CBA.
This could be gleaned from Article 266 of the Labor
Code which provides that:
 “ART. 266. Jurisdiction of Voluntary Arbitrators or
Panel of Voluntary Arbitrators – x x x violations of a
Collective Bargaining Agreement, except those which
are gross in character, shall no longer be treated as
unfair labor practice an 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.”
GRIEVANCE MACHINERY – MANDATORY
REQUIREMENT FOR EVERY CBA
In the Philippine context, the parties are obliged to
include in their CBA a provision on grievance
machinery. This is a mandatory requirement. A CBA
which does not contain a provision on grievance
machinery will not be registered. This could be gleaned
from Article 265 of the Labor Code which provides that:
“ART. 273. Grievance Machinery and Voluntary
Arbitration - the parties to a Collective Bargaining
Agreement shall include therein provisions that will
ensure the mutual observance of its terms and
conditions. They should establish a machinery for the
adjustment and resolution of grievances arising from
the interpretation or implementation of their Collective
Bargaining Agreement and those arising from the
interpretation or enforcement of the company personnel
policies.”
JURISDICTIONAL PRECONDITONS OF
VOLUNTARY ARBITRATION
a) The dispute should first be brought to the
grievance machinery for resolution;
b) The grievance machinery failed to resolve the
dispute; and
c) The parties must agree to submit the dispute for
voluntary arbitration.
VOLUNTARY ARBITRATOR

In its simplest term, a voluntary arbitrator is any

person chosen by the parties to resolve their
controversies or disputes.
Who can be a voluntary arbitrator?
a) Any person accredited as such by the National
Conciliation and Mediation Board;
b) Any person chosen or designated in the CBA;
c) Any person chosen pursuant to a selection
procedure agreed upon in the CBA; or
d) Any official who may be authorized by the Secretary
of Labor and Employment to act as voluntary
arbitrator upon the written request and agreement
of the parties. [Art. 218(n)(, Labor Code]
 The parties can even choose a Labor Arbitrator
to as voluntary arbitrator. There is nothing in the
law that prohibits labor arbiters from acting as
voluntary arbitrators as long as the parties agree
to have him hear and decide their dispute [Manila
Central line Corp. v. MCLFWU-NFL, 290 SCRA 690].
SELECTION PROCEDURE
The voluntary arbitrator may be designated in
advance in the CBA or the CBA can stipulate on the
procedure for the selection of voluntary arbitrator.
If the parties cannot agree on the choice of the
voluntary arbitrator despite the procedure outlined in
the CBA, the National Conciliation and Mediation Board
shall designate the Voluntary Arbitrator. This could be
gleaned from the provisions of Article 265of the Labor
Code which provides that:
 “ART. 265. Grievance Machinery and Voluntary
Arbitration – x x x In case the parties fail to select a
Voluntary Arbitrator or panel of Voluntary
Arbitrators, the Board shall designate the Voluntary
Arbitrator or panel of Voluntary Arbitrators, as may
be necessary, pursuant to the selection procedure
agreed upon in the Collective Bargaining Agreement,
which shall act with the same force and effect as if
the arbitrator or panel of Arbitrators has been
selected by the parties as described above.”
JURISDICTION OF VOLUNTARY
ARBITRATORS
Voluntary arbitrators have original and exclusive
jurisdiction over the following:
a) Unresolved grievance arising from interpretation
or implementation of a CBA or interpretation or
enforcement of company personnel policies [Art.
266. Labor Code as amended];
b) Wage distortion disputes in organized
establishment [Art. 124., Labor Code];
c) Disputes arising from interpretation and
implementation of the productivity incentive
programs under Republic Act No. 6971 [Sec. 4,
Rule XIX, Book V, Rules Implementing the Labor
Code, as amended by D.O. 40-03].
JURISDICTION OVER ULPs AND CBA
DEADLOCK
Voluntary arbitrators can acquire jurisdiction over
complaints for unfair labor practices and deadlock in CBA
negotiation only when the parties agree to submit the matter
to voluntary arbitration. Without an express agreement
between the parties, no one can arrogate into the powers of
voluntary arbitrators the original and jurisdiction of Labor
Arbitrators over unfair labor practices termination disputes,
and claims for damages [Vivero v. Court of Appeals, 344 SCRA
268].
JURISDICTION OVER TERMINATION
DISPUTES
By law, the jurisdiction of voluntary arbitrators is confined
to termination disputes arising from interpretation and
implementation of the CBA or company personnel policies. It
does not extend to violations of the Code of Discipline
[Navarro v. Damasco, 246 SCRA 260].
Disputes resulting from enforcement of disciplinary rules
fall with in the original and exclusive jurisdiction of the Labor
Arbiter. This could be gleaned from Article 282(b0 of the Labor
Code which expressly provides that:
 “ART. 282. Miscellaneous Provision. – x x x (b) Subject
to the constitutional right of workers to security of tenure
and their right to be protected against dismissal except
for a just and authorized cause and without prejudice to
the requirement of notice under Article 283 [now Article
283] of this Code, the employer shall furnish the worker
whose employment is sought to be terminated a written
notice containing a statement of the causes for
termination and shall afford the latter ample opportunity
to heard.
to be heard and to defend himself with the assistance
of his representative if he so desires in accordance with
the company rules and regulations promulgated
pursuant to guidelines set by the department of Labor
and Employment. Any decision taken by the employer
shall be without prejudice to the right of the worker
to contest the validity or legality of his dismissal by
filing a complaint with the regional branch of the
national Labor Regulations Commission
THE DELINEATION OF JURISDICTION
If the issue pertains only to interpretation or
implementation, the termination dispute is cognizable by
the grievance machinery and voluntary arbitration.
If the issue pertains to the validity of the dismissal, the
termination dispute is cognizable by the Labor Arbiter
because the issue is no longer on interpretation or
implementation (of collective bargaining agreement or
personnel policies) but on the validity of the dismissal
[Sanyo Phils. Workers Union v. Canizares, 211 SCRA 361].
WHEN THE VOLUNTARY ARBITRATOR
ACQUIRES JURISDICTION
The jurisdiction of the voluntary arbitrator over the
dispute is acquired upon receipt of the Submission
Agreement duly signed by both parties [Sec. 3, Rule IV,
Procedure Guidelines in the Conduct of Voluntary
Arbitration Proceeding].
POWERS OF VOLUNTARY ARBITRATOR

a) Conciliate or mediate the parties;

b) Conduct hearings and receive evidence;
c) Issue subpoena ad testificandum or duces
tecum; and
d) Issue writs of executions.
SCOPE OF ARBITRATION AWARDS
The power and authority of voluntary arbitrators to
decide a case is limited to those matter which have
been submitted to them for arbitration. They may grant
any remedy or relief which they may deem just and
equitable, provided that it is within the scope of the
submission agreement [Sec. 1, Rule V, Procedure
Guidelines in the Conduct of Voluntary Arbitration
proceeding].
JUDICIAL REVIEW OF ARBITRATION AWARDS
Decision or awards of voluntary arbitrators are appealable to the
Court of Appeals under Rule 43 of the Rules of Court and not through a
special civil action for certiorari under Rule 65 [AMA Computer College
v. Nacino, 544 SCRA 502].
POWER TO ENFORCE ARBITRATION AWARDS
The voluntary arbitrator has the power to issue writ of
execution and may require the sheriff of the National
Labor Relations Commission or the regular courts or any
public official whom the parties may designate in the
submission agreement, to execute the arbitration award.
In the absence of the voluntary arbitrator or in case of his
incapacity, the motion for issuance of writ of execution
over the workplace [Sec. 7, Rule VII, Procedural Guidelines
in the Conducts of Voluntary Arbitration].
VOLUNTARY ARBITRATOR’S FEE AND
ARBITRATION COST
Unless the parties agree otherwise, the cost of
voluntary arbitration proceedings and voluntary
arbitrator’s fee shall be shared equally by the parties. If
their funds are insufficient, they may avail the subsidy
under the Special Voluntary Arbitrator’s Fund [Sec. 9,
Rule XIX, Book V, Rules Implementing the Labor Code as
amended].