Ace Navigation vs. Fernandez GR 197309, Oct. 10, 2012

Fact: On October 9, 2008, seaman Respondent filed with the NLRC a complaint for disability benefits, with prayer for moral and exemplary damages, plus attorney’s fees, against petitioners. The petitioners moved to dismiss the complaint, contending that the labor arbiter had no jurisdiction over the dispute. They argued that exclusive original jurisdiction is with the voluntary arbitrator or panel of voluntary arbitrators, pursuant to Section 29 of the POEA Standard Employment Contract (POEA-SEC), since the parties are covered by the CBA. Under Section 14 of the CBA, a dispute between a seafarer and the company shall be settled through the grievance machinery and mandatory voluntary arbitration. Fernandez opposed the motion. He argued that inasmuch as his complaint involves a money claim, original and exclusive jurisdiction over the case is vested with the labor arbiter. Labor Arbiter denied the motion to dismiss, holding that under Section 10 of Republic Act (R.A.) No. 8042, the Migrant Workers and Overseas Filipinos Act of 1995, the labor arbiter has original and exclusive jurisdiction over money claims arising out of an employer-employee relationship or by virtue of any law or contract, notwithstanding any provision of law to the contrary. The petitioners appealed to the NLRC, but the labor agency denied the appeal. The petitioners moved for reconsideration, but the NLRC denied the motion, prompting the petitioners to elevate the case to the CA which was also denied, Hence the petition.

Issue:  Whether the Mandatory Arbitration can be waived?

Held:  No, Contrary to the CA’s reading of the CBA’s Article 14, there is unequivocal or unmistakable language in the agreement which mandatorily requires the parties to submit to the grievance procedure any dispute or cause of action they may have against each other. Any Dispute, grievance, or misunderstanding concerning any ruling, practice, wages or working conditions in the COMPANY or any breach of the Contract of Employment, or any dispute arising from the meaning or application of the provisions of this Agreement or a claim of violation thereof or any complaint or cause of action that any such Seaman may have against the COMPANY, as well as complaints which the COMPANY may have against such Seaman shall be brought to the attention of the GRIEVANCE RESOLUTION COMMITTEE before either party takes any action, legal or otherwise. Bringing such a dispute to the Grievance Resolution Committee shall be unwaivable prerequisite or condition precedent for bringing any action, legal or otherwise, in any forum and the failure to so refer the dispute shall bar any and all legal or other actions. If by reason of the nature of the Dispute, the parties are unable to amicably settle the dispute, either party may refer the case to a MANDATORY ARBITRATION COMMITTEE. The MANDATORY ARBITRATION COMMITTEE shall consist of one representative to be designated by the UNION, and one representative to be designated by the COMPANY and a third member who shall act as Chairman and shall be nominated by mutual choice of the parties.

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