Ace Navigation v. Fernandez
REITERATIONFacts
The Antecedents: Seaman Teodorico Fernandez filed a complaint for disability benefits, moral and exemplary damages, and attorney's fees against Ace Navigation Co., Inc., Vela International Marine Ltd., and Rodolfo Pamintuan. The petitioners sought to dismiss the complaint, asserting that the National Labor Relations Commission (NLRC) lacked jurisdiction. They argued that exclusive original jurisdiction belonged to a voluntary arbitrator or panel of voluntary arbitrators, citing Section 29 of the POEA Standard Employment Contract (POEA-SEC) and Section 14 of the parties' collective bargaining agreement (CBA), which mandated dispute resolution through a grievance machinery and voluntary arbitration. Procedural History: The Labor Arbiter denied the motion to dismiss, holding that under Section 10 of Republic Act No. 8042, labor arbiters have original and exclusive jurisdiction over money claims. The NLRC affirmed this, adding that the denial of a motion to dismiss is an interlocutory order and not appealable. The petitioners then filed a petition for certiorari with the Court of Appeals (CA). The CA denied the petition, finding that the petitioners used the wrong remedy and that, on the merits, the labor arbiter retained jurisdiction over money claims, as the CBA did not unequivocally submit such claims to voluntary arbitration. The Petition: The petitioners seek review on certiorari under Rule 45 of the Rules of Court, arguing that the CA erred in disregarding the Omnibus Implementing Rules and Regulations of the Migrant Workers and Overseas Filipinos Act of 1995, as amended by R.A. No. 10022, which mandates voluntary arbitration for OFWs with CBAs. They also contend that the CA misinterpreted the CBA, failing to recognize the unequivocal language mandating referral to mandatory arbitration, particularly Section 14.7(h) which states such referral is an unwaivable prerequisite. Furthermore, they point to an NLRC memorandum directing dismissal of cases initially processed in grievance machinery and referral to voluntary arbitration, and cite a Supreme Court ruling in a similar case (Estate of Nelson R. Dulay) upholding voluntary arbitrator jurisdiction over seafarers' money claims.
Issue(s)
Whether the Court of Appeals committed a reversible error in disregarding the Omnibus Implementing Rules and Regulations of the Migrant Workers and Overseas Filipinos Act of 1995, as amended by R.A. No. 10022, mandating that cases involving OFWs with CBAs shall be submitted for voluntary arbitration. Whether the Court of Appeals committed a reversible error in ruling that the AMOSUP-VELA CBA does not contain unequivocal wordings for the mandatory referral of Fernandez’s claim to voluntary arbitration. Whether the Court of Appeals committed a reversible error in disregarding the NLRC memorandum prescribing the appropriate action for complaints initially processed in the grievance machinery of existing CBAs, and whether the ruling in Estate of Nelson R. Dulay v. Aboitiz Jebsen Maritime, Inc. should be applied to the present case. Whether Fernandez's claim for disability benefits falls under the original and exclusive jurisdiction of the labor arbiter under Section 10 of R.A. No. 8042, despite the existence of a CBA.
Ruling
The petition is GRANTED. The assailed decision and resolution of the Court of Appeals are SET ASIDE. Teodorico Fernandez's disability claim is REFERRED to the Grievance Resolution Committee of the parties' collective bargaining agreement and/or the Mandatory Arbitration Committee, if warranted.
Ratio Decidendi
On the jurisdiction over Fernandez's disability claim: The Court held that under the Constitution, the Labor Code, and the POEA-SEC, the voluntary arbitrator or panel of voluntary arbitrators has original and exclusive jurisdiction over Fernandez's disability claim. This is because the claim arose from his employment, and his relationship with the petitioners was covered by a CBA. The Court found that Article 14 of the CBA, when read in its entirety, particularly Section 14.7(h), unequivocally mandates the submission of unresolved disputes to mandatory voluntary arbitration as a prerequisite for any legal action. The use of the word "may" in Section 14.7(a) was clarified by the explicit language in Section 14.7(h), which states that referral to the Mandatory Arbitration Committee is an "unwaivable prerequisite or condition precedent." Therefore, the CA committed a reversible error in disregarding the clear mandate of the CBA and the POEA-SEC. The Court also addressed the procedural lapse of appealing an interlocutory order, noting that while the denial of the motion to dismiss was an interlocutory order and thus not appealable under the NLRC Rules, the CA proceeded to review the merits of the case, which was deemed appropriate under Article 221 of the Labor Code. On the interpretation of the CBA and POEA-SEC: The Court found that the CA's interpretation of the CBA was strained. It failed to consider Section 14.7(h) of the CBA, which clearly states that referral to mandatory arbitration is an unwaivable prerequisite. This provision, read in conjunction with Section 14.6 and Section 14.7(a), demonstrates the parties' unequivocal agreement to submit disputes to voluntary arbitration. Furthermore, Section 29 of the POEA-SEC requires parties covered by a CBA to submit claims and disputes to the original and exclusive jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators. The Court reiterated the ruling in Vivero v. Court of Appeals that parties' submission to voluntary arbitration must be expressed in unequivocal language, which was satisfied in this case. On the NLRC Memorandum and other cited cases: The Court noted that the NLRC memorandum cited by the petitioners further supports the ruling. It also found the petitioners' reliance on Estate of Nelson R. Dulay v. Aboitiz Jebsen Maritime, Inc. to be well-placed, as that case also upheld the jurisdiction of the voluntary arbitrator over a seafarer's money claim. The Court reiterated that when parties have validly agreed on a procedure for resolving grievances and submitting disputes to voluntary arbitration, that procedure must be strictly observed. On the applicability of R.A. No. 8042: The Court rejected Fernandez's contention that his claim for disability benefits, being a money claim, falls under the original and exclusive jurisdiction of the labor arbiter under Section 10 of R.A. No. 8042. It held that this provision is qualified by the parties' agreement to submit disputes to voluntary arbitration, as mandated by the CBA and the POEA-SEC. The Court emphasized the State's preference for voluntary modes of dispute settlement as enshrined in the Constitution and the Labor Code.
Main Doctrine
The jurisdiction over a seafarer's disability claim, when covered by a Collective Bargaining Agreement (CBA) with a mandatory arbitration clause, lies with the Voluntary Arbitrator, notwithstanding Section 10 of R.A. No. 8042, as amended, which vests original and exclusive jurisdiction over money claims with the Labor Arbiter. The parties' unequivocal agreement in the CBA to submit disputes to voluntary arbitration, as mandated by the POEA-SEC, must be strictly observed.