Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 120319 October 6, 1995 LUZON DEVELOPMENT !N", petitioner, vs. !SSOC#!T#ON O$ LUZON DEVELOPMENT !N" EMPLO%EES &'( !TT%. ESTER S. G!RC#! )' *er c&+&c)t, &- VOLUNT!R% !R #TR!TOR, respondents.

ROMERO, J.: From a submission agreement of the u!on "evelopment Ban# $ "B% and the Association of u!on "evelopment Ban# Emplo&ees $A "BE% arose an arbitration case to resolve the follo'ing issue( )hether or not the compan& has violated the Collective Bargaining Agreement provision and the Memorandum of Agreement dated April *++,, on promotion. At a conference, the parties agreed on the submission of their respective Position Papers on "ecember *-*., *++,. Att&. Ester /. 0arcia, in her capacit& as 1oluntar& Arbitrator, received A "BE2s Position Paper on 3anuar& *4, *++.. "B, on the other hand, failed to submit its Position Paper despite a letter from the 1oluntar& Arbitrator reminding them to do so. As of Ma& 56, *++. no Position Paper had been filed b& "B. 7n Ma& 5,, *++., 'ithout "B2s Position Paper, the 1oluntar& Arbitrator rendered a decision disposing as follo's( )8EREF7RE, finding is hereb& made that the Ban# has not adhered to the Collective Bargaining Agreement provision nor the Memorandum of Agreement on promotion. 8ence, this petition for certiorari and prohibition see#ing to set aside the decision of the 1oluntar& Arbitrator and to prohibit her from enforcing the same. 9n labor la' conte:t, arbitration is the reference of a labor dispute to an impartial third person for determination on the basis of evidence and arguments presented b& such parties 'ho have bound themselves to accept the decision of the arbitrator as final and binding. Arbitration ma& be classified, on the basis of the obligation on 'hich it is based, as either compulsor& or voluntar&. Compulsor& arbitration is a s&stem 'hereb& the parties to a dispute are compelled b& the government to forego their right to stri#e and are compelled to accept the resolution of their dispute through arbitration b& a third part&. 1;he essence of arbitration remains since a resolution of a dispute is arrived at b& resort to a disinterested third part& 'hose decision is final and binding on the parties, but in compulsor& arbitration, such a third part& is normall& appointed b& the government.

<nder voluntar& arbitration, on the other hand, referral of a dispute b& the parties is made, pursuant to a voluntar& arbitration clause in their collective agreement, to an impartial third person for a final and binding resolution. 29deall&, arbitration a'ards are supposed to be complied 'ith b& both parties 'ithout dela&, such that once an a'ard has been rendered b& an arbitrator, nothing is left to be done b& both parties but to compl& 'ith the same. After all, the& are presumed to have freel& chosen arbitration as the mode of settlement for that particular dispute. Pursuant thereto, the& have chosen a mutuall& acceptable arbitrator 'ho shall hear and decide their case. Above all, the& have mutuall& agreed to de bound b& said arbitrator2s decision. 9n the Philippine conte:t, the parties to a Collective Bargaining Agreement $CBA% are re=uired to include therein provisions for a machiner& for the resolution of grievances arising from the interpretation or implementation of the CBA or compan& personnel policies. 3 For this purpose, parties to a CBA shall name and designate therein a voluntar& arbitrator or a panel of arbitrators, or include a procedure for their selection, preferabl& from those accredited b& the National Conciliation and Mediation Board $NCMB%. Article 5>* of the abor Code accordingl& provides for e:clusive original ?urisdiction of such voluntar& arbitrator or panel of arbitrators over $*% the interpretation or implementation of the CBA and $5% the interpretation or enforcement of compan& personnel policies. Article 5>5 authori!es them, but onl& upon agreement of the parties, to e:ercise ?urisdiction over other labor disputes. 7n the other hand, a labor arbiter under Article 5*@ of the abor Code has ?urisdiction over the follo'ing enumerated cases( . . . $a% E:cept as other'ise provided under this Code the abor Arbiters shall have original and e:clusive ?urisdiction to hear and decide, 'ithin thirt& $6A% calendar da&s after the submission of the case b& the parties for decision 'ithout e:tension, even in the absence of stenographic notes, the follo'ing cases involving all 'or#ers, 'hether agricultural or non-agricultural( *. <nfair labor practice casesB 5. ;ermination disputesB 6. 9f accompanied 'ith a claim for reinstatement, those cases that 'or#ers ma& file involving 'ages, rates of pa&, hours of 'or# and other terms and conditions of emplo&mentB ,. Claims for actual, moral, e:emplar& and other forms of damages arising from the emplo&er-emplo&ee relationsB .. Cases arising from an& violation of Article 5>, of this Code, including =uestions involving the legalit& of stri#es and loc#outsB >. E:cept claims for Emplo&ees Compensation, /ocial /ecurit&, Medicare and maternit& benefits, all other claims, arising from emplo&er-emplo&ee relations, including those of persons in domestic or household service, involving an amount e:ceeding five thousand pesos $P.,AAA.AA% regardless of 'hether accompanied 'ith a claim for reinstatement. ::: ::: ::: 9t 'ill thus be noted that the ?urisdiction conferred b& la' on a voluntar& arbitrator or a panel of such arbitrators is =uite limited compared to the original ?urisdiction of the labor arbiter and the appellate ?urisdiction of the National abor Relations Commission $N RC% for that matter. . ;he state of our present la' relating to voluntar& arbitration provides that C$t%he a'ard or decision of

the 1oluntar& Arbitrator . . . shall be final and e:ecutor& after ten $*A% calendar da&s from receipt of the cop& of the a'ard or decision b& the parties,C 5 'hile the C$d%ecision, a'ards, or orders of the abor Arbiter are final and e:ecutor& unless appealed to the Commission b& an& or both parties 'ithin ten $*A% calendar da&s from receipt of such decisions, a'ards, or orders.C 6 8ence, 'hile there is an e:press mode of appeal from the decision of a labor arbiter, Republic Act No. >@*. is silent 'ith respect to an appeal from the decision of a voluntar& arbitrator. Det, past practice sho's that a decision or a'ard of a voluntar& arbitrator is, more often than not, elevated to the /upreme Court itself on a petition for certiorari, / in effect e=uating the voluntar& arbitrator 'ith the N RC or the Court of Appeals. 9n the vie' of the Court, this is illogical and imposes an unnecessar& burden upon it. 9n Volkschel Labor Union, et al. v. NLRC, et al., 0 on the settled premise that the ?udgments of courts and a'ards of =uasi-?udicial agencies must become final at some definite time, this Court ruled that the a'ards of voluntar& arbitrators determine the rights of partiesB hence, their decisions have the same legal effect as ?udgments of a court. 9n Oceanic Bic Division (FFW), et al. v. Romero, et al., 9 this Court ruled that Ca voluntar& arbitrator b& the nature of her functions acts in a =uasi-?udicial capacit&.C <nder these rulings, it follo's that the voluntar& arbitrator, 'hether acting solel& or in a panel, en?o&s in la' the status o a !uasi"#u$icial a%enc& but independent of, and apart from, the N RC since his decisions are not appealable to the latter. 10 /ection + of B.P. Blg. *5+, as amended b& Republic Act No. @+A5, provides that the Court of Appeals shall e:ercise( ::: ::: ::: $B% E:clusive appellate ?urisdiction over all final ?udgments, decisions, resolutions, orders or a'ards of Regional ;rial Courts and =uasi-?udicial agencies, instrumentalities, boards or commissions, including the /ecurities and E:change Commission, the Emplo&ees Compensation Commission and the Civil /ervice Commission, e:cept those falling 'ithin the appellate ?urisdiction of the /upreme Court in accordance 'ith the Constitution, the abor Code of the Philippines under Presidential "ecree No. ,,5, as amended, the provisions of this Act, and of subparagraph $*% of the third paragraph and subparagraph $,% of the fourth paragraph of /ection *@ of the 3udiciar& Act of *+,4. ::: ::: ::: Assuming ar%uen$o that the voluntar& arbitrator or the panel of voluntar& arbitrators ma& not strictl& be considered as a =uasi-?udicial agenc&, board or commission, still both he and the panel are comprehended 'ithin the concept of a C=uasi-?udicial instrumentalit&.C 9t ma& even be stated that it 'as to meet the ver& situation presented b& the =uasi-?udicial functions of the voluntar& arbitrators here, as 'ell as the subse=uent arbitratorEarbitral tribunal operating under the Construction 9ndustr& Arbitration Commission, 11 that the broader term CinstrumentalitiesC 'as purposel& included in the above-=uoted provision. An Cinstrumentalit&C is an&thing used as a means or agenc&. 12 ;hus, the terms governmental Cagenc&C or Cinstrumentalit&C are s&non&mous in the sense that either of them is a means b& 'hich a government acts, or b& 'hich a certain government act or function is performed. 13 ;he 'ord Cinstrumentalit&,C 'ith respect to a state, contemplates an authorit& to 'hich the state delegates governmental po'er for the performance of a state function. 1. An individual person, li#e an administrator or e:ecutor, is a ?udicial instrumentalit& in the settling of an estate, 15 in the same manner that a sub-agent appointed b& a ban#ruptc& court is an instrumentalit& of the court,16 and a trustee in ban#ruptc& of a defunct corporation is an instrumentalit& of the state. 1/

;he voluntar& arbitrator no less performs a state function pursuant to a governmental po'er delegated to him under the provisions therefor in the abor Code and he falls, therefore, 'ithin the contemplation of the term Cinstrumentalit&C in the afore=uoted /ec. + of B.P. *5+. ;he fact that his functions and po'ers are provided for in the abor Code does not place him 'ithin the e:ceptions to said /ec. + since he is a =uasi-?udicial instrumentalit& as contemplated therein. 9t 'ill be noted that, although the Emplo&ees Compensation Commission is also provided for in the abor Code, Circular No. *-+*, 'hich is the forerunner of the present Revised Administrative Circular No. *-+., laid do'n the procedure for the appealabilit& of its decisions to the Court of Appeals under the foregoing rationali!ation, and this 'as later adopted b& Republic Act No. @+A5 in amending /ec. + of B.P. *5+. ' ortiori, the decision or a'ard of the voluntar& arbitrator or panel of arbitrators should li#e'ise be appealable to the Court of Appeals, in line 'ith the procedure outlined in Revised Administrative Circular No. *-+., ?ust li#e those of the =uasi-?udicial agencies, boards and commissions enumerated therein. ;his 'ould be in furtherance of, and consistent 'ith, the original purpose of Circular No. *-+* to provide a uniform procedure for the appellate revie' of ad?udications of all =uasi-?udicial entities 10 not e:pressl& e:cepted from the coverage of /ec. + of B.P. *5+ b& either the Constitution or another statute. Nor 'ill it run counter to the legislative intendment that decisions of the N RC be revie'able directl& b& the /upreme Court since, precisel&, the cases 'ithin the ad?udicative competence of the voluntar& arbitrator are e:cluded from the ?urisdiction of the N RC or the labor arbiter. 9n the same vein, it is 'orth mentioning that under /ection 55 of Republic Act No. 4@>, also #no'n as the Arbitration a', arbitration is deemed a special proceeding of 'hich the court specified in the contract or submission, or if none be specified, the Regional ;rial Court for the province or cit& in 'hich one of the parties resides or is doing business, or in 'hich the arbitration is held, shall have ?urisdiction. A part& to the controvers& ma&, at an& time 'ithin one $*% month after an a'ard is made, appl& to the court having ?urisdiction for an order confirming the a'ard and the court must grant such order unless the a'ard is vacated, modified or corrected. 19 9n effect, this e=uates the a'ard or decision of the voluntar& arbitrator 'ith that of the regional trial court. Conse=uentl&, in a petition for certiorari from that a'ard or decision, the Court of Appeals must be deemed to have concurrent ?urisdiction 'ith the /upreme Court. As a matter of polic&, this Court shall henceforth remand to the Court of Appeals petitions of this nature for proper disposition. ACC7R"9N0 D, the Court resolved to REFER this case to the Court of Appeals. /7 7R"ERE". (a$illa, Re%ala$o, Davi$e, )r*, Bellosillo, (uno, Vitu%, +a,unan, -en$o.a, Francisco an$ /ermosisima, )r*, ))*, concur* Feliciano, )*, concurs in the result* Narvasa, C*)* an$ -elo, )* are on leave* $oot'ote* /eide, A "ictionar& of Arbitration $*+@A%. 5 0bi$.

6 Art. 5>A, abor Code. , Art. 5*@, abor Code. . Art. 5>5-A, par. ,, abor Code. > Art. 556, abor Code. @ 7ceanic Bic "ivision $FF)%, et al. v. Romero, et al., *6A /CRA 6+5 $*+4,%B /ime "arb& Pilipinas, 9nc. v. Magsalin, et al., *4A /CRA *@@ $*+4+%. 4 +4 /CRA 6*, $*+4A%. + 1u,ra. *A Art. 5>5-A, in relation to Art. 5*@ $b% and $c%, abor Code, as amended b& /ec. +, R.A. >@*.. ** E:ecutive 7rder No. *AA4. *5 aurens Federal /av. and oan Ass2n v. /outh Carolina ;a: Commission, **5 /.E. 5d @*>, @*+, 56> /.C. 5. *6 0ovt. of P.9. v. /pringer, et al., .A Phil. 5.+, 66, $*+5@%. *, Ciulla v. /tate, @@ N.D./. 5d .,., ..A, *+* Misc. .54. *. 9n re ;urncoc#2s Estate, 6AA N.). *.., *.>, 564 )is. ,64. *> 9n re Bro'n Co., ".C. Me., 6> F. /upp. 5@., 5@@. *@ 0agne v. Brush, ".C.N.8., 6A F. /upp. @*,, @*>. *4 First epanto Ceramics, 9nc. v. CA, et al., 56* /CRA 6A $*++,%. *+ /ection 56, R.A. No. 4@>.