Imperial Textile Mills, Inc. vs. Sampang

A voluntary arbitrator who has rendered a final award is functus officio and cannot entertain a motion for reconsideration or reverse his own decision; the ten-calendar-day finality period under Article 262-A, as amended by R.A. 6715, does not apply retroactively to an award that had already become final before the amendment took effect.

Imperial Textile Mills, Inc. and the Imperial Textile Mills-Monthly Employees Association were parties to a collective bargaining relationship, with wages governed by both a CBA and a job classification and wage standardization plan. The statutory backdrop is the Labor Code's treatment of voluntary arbitration awards: Article 263 then provided that such awards are final, inappealable, and executory, while R.A. 6715 later introduced Article 262-A and its ten-calendar-day finality period.

Imperial Textile Mills, Inc. and the Imperial Textile Mills-Monthly Employees Association entered into a collective bargaining agreement on March 20, 1987, providing across-the-board salary increases and other benefits retroactive to November 1, 1986. On August 21, 1987, they executed another agreement on the job classification and wage standardization plan, also to take effect retroactively on November 1, 1986.

A dispute subsequently arose in the interpretation of the two agreements. The parties submitted it to arbitration and designated public respondent Vladimir P.L. Sampang as the Voluntary Arbitrator, with the understanding that his decision would be final, executory, and inappealable.

The Company maintained that the wage of a particular employee subject to possible adjustment on base pay should be the pay with the first year CBA increase already integrated therein. The Union argued that the CBA increases should not be included in adjusting the wages to the base pay level, as it was separate and distinct from the increases resulting from the job classification and standardization scheme.

On July 12, 1988, the Voluntary Arbitrator rendered a decision upholding the formula used by the Company. The Union filed a motion for reconsideration, which the Company opposed. On December 14, 1988, after a conference with the parties, the Voluntary Arbitrator rendered another decision, this time in favor of the Union.

On January 20, 1989, the Company appealed to the NLRC. The appeal was dismissed for lack of jurisdiction because the original rule allowing appeal if the Voluntary Arbitrator's award was more than P100,000.00 had already been repealed by BP 130, and under Article 262-A of the Labor Code, as amended, awards or decisions of voluntary arbitrators become final and executory after ten calendar days from notice thereof to the parties. The Company then filed a petition for certiorari under Rule 65 of the Rules of Court.

• Wage Adjustment Formula: Petitioner maintained that the wage of a particular employee subject to possible adjustment on base pay should be the pay with the first year CBA increase already integrated therein.

• Wage Adjustment Formula: Respondent Union argued that the CBA increases should not be included in adjusting the wages to the base pay level, as it was separate and distinct from the increases resulting from the job classification and standardization scheme.

• Finality and Jurisdiction of Voluntary Arbitrator: Whether the Voluntary Arbitrator retained jurisdiction to entertain the Union's motion for reconsideration and reverse his July 12, 1988 decision after rendering a final and inappealable award.
• Retroactive Application of Article 262-A: Whether Article 262-A of the Labor Code, as amended by R.A. 6715, which makes voluntary arbitration awards final after ten calendar days from notice, may be applied retroactively to the July 12, 1988 decision that had already become final before the amendment took effect.

• Finality and Jurisdiction of Voluntary Arbitrator: No. The Voluntary Arbitrator lost jurisdiction upon rendering his July 12, 1988 decision; having become functus officio, he could not entertain the Union's motion for reconsideration or reverse himself.
• Retroactive Application of Article 262-A: No. Article 262-A, as amended by R.A. 6715, is procedural and may apply to pending actions, but it cannot apply to a decision that had already become final before the amendment took effect on March 21, 1989.

• Finality and Jurisdiction of Voluntary Arbitrator: The parties expressly agreed that the Voluntary Arbitrator's decision would be final, executory, and inappealable. Even without that stipulation, Article 263 of the Labor Code then provided that voluntary arbitration awards or decisions shall be final, inappealable, and executory. Although Article 263 did not expressly fix the time when the award would become final, the SC held that it assumes finality upon issuance, subject only to judicial review in appropriate cases. Under Consolidated Bank & Trust Corporation (SOLIDBANK) vs. Bureau of Labor Relations, the Voluntary Arbitrator lost jurisdiction the moment he rendered his decision; he could no longer entertain a motion for reconsideration for reversal or modification, and doing so exceeded his authority. The SC thus held that the Union erred in filing the motion for reconsideration and that the Voluntary Arbitrator erred in entertaining it and vacating his first decision. The December 14, 1988 decision, rendered without jurisdiction, was null and void.
• Retroactive Application of Article 262-A: The present rule, Article 262-A as amended by R.A. 6715, makes a voluntary arbitration award final and executory after ten calendar days from receipt of the copy of the award or decision by the parties; presumably, the Voluntary Arbitrator may still reconsider the decision on a motion for reconsideration filed during that period. Such a procedural provision may be applied retroactively to pending actions, as held in Enrile vs. CFI, Hosana vs. Diomano and Diomano, and Laguio vs. Gamet. However, it cannot be applied to a case in which the decision had already become final before the new provision took effect, as held in People vs. Sumilang. R.A. 6715 became effective on March 21, 1989, while the first decision was rendered on July 12, 1988, when Article 263 was in force. The first decision therefore became final under the old law, and Article 262-A's ten-day period did not apply to it.

• Functus officio — Once an arbitrator has made and published a final award, his authority is exhausted and he can do nothing more in regard to the subject matter of the arbitration. Applied here, the Voluntary Arbitrator became functus officio after his July 12, 1988 decision and could not act on the Union's motion for reconsideration or issue the December 14, 1988 reversal.
• Finality of voluntary arbitration awards — Under Article 263 of the Labor Code then in force, voluntary arbitration awards or decisions are final, inappealable, and executory; absent an express period, finality attaches upon issuance, subject only to judicial review in appropriate cases. Applied here, the July 12, 1988 decision was final upon issuance, and the parties had also stipulated that it would be final, executory, and inappealable.
• Res judicata effect of arbitration awards — A voluntary arbitrator's decision or award is accorded the benefits of the doctrine of res judicata as in judgments of regular courts of law. Applied here, the first decision barred the arbitrator from reconsidering and reversing it.
• Retroactivity of procedural laws — Procedural laws may be applied retroactively to pending actions, but not to cases where the decision had already become final before the new provision took effect. Applied here, Article 262-A's ten-calendar-day period did not apply to the July 12, 1988 decision, which had already become final before R.A. 6715 took effect on March 21, 1989.

• "When the parties submitted their grievance to arbitration, they expressly agreed that the decision of the Voluntary Arbitrator would be final, executory and inappealable." — The SC used this stipulation to reinforce that the first award was immediately final and could not be revisited by the arbitrator.
• "The public respondent exceeded his authority when he acted on the Union's motion for reconsideration and reversed his original decision." — This is the SC's direct holding that the second decision was issued without jurisdiction.
• "The power and authority of the Voluntary Arbitrator to act in the case commences from his appointment and acceptance to act as such under the submission agreement of the Parties and terminates upon his rendition of his decision or award which is accorded the benefits of the doctrine of res judicata as in judgments of our regular courts of law." — Quoted from SOLIDBANK and adopted by the SC to explain why the arbitrator could not act after the award.
• "It is true that the present rule makes the voluntary arbitration award final and executory after ten calendar days from receipt of the copy of the award or decision by the parties." — The SC acknowledged Article 262-A but held it could not be applied to a decision already final before the amendment took effect.

• Consolidated Bank & Trust Corporation (SOLIDBANK) vs. Bureau of Labor Relations, et al., G.R. No. 64926, October 15, 1984 — Controlling precedent; held that the Voluntary Arbitrator lost jurisdiction upon rendering his decision and could no longer entertain a motion for reconsideration.
• La Vale Plaza, Inc. vs. R.S. Noonan, Inc. — Cited for the common-law principle that once an arbitrator has made and published a final award, his authority is exhausted and he is functus officio.
• Enrile vs. CFI, 36 Phil. 574 — Cited to support retroactive application of procedural laws to pending actions.
• Hosana vs. Diomano and Diomano, 56 Phil. 741 — Cited to support retroactive application of procedural laws to pending actions.
• Laguio vs. Gamet, 171 SCRA 392 — Cited to support retroactive application of procedural laws to pending actions.
• People vs. Sumilang, 77 Phil. 764 — Cited for the exception: a new procedural rule cannot apply to a case where the decision had become final before the new provision took effect.
• Cayena vs. NLRC, 194 SCRA 134 — Cited in support of the nullity of the second decision.
• Egypt Air Local Employees Association NTUIA-Transphil Tupas vs. NLRC, et al., G.R. No. 98933 — Cited in support of the nullity of the second decision.

• Article 263, Labor Code — Then in force when the July 12, 1988 decision was rendered; provided that voluntary arbitration awards or decisions shall be final, inappealable, and executory. Applied to make the first decision final upon issuance.
• Article 262-A, Labor Code, as amended by R.A. 6715 — Introduced the ten-calendar-day period from receipt for finality of voluntary arbitration awards; effective March 21, 1989. Held procedural but not applicable retroactively to the first decision already final before its effectivity.
• BP 130 — Repealed the original rule allowing appeal to the NLRC if the Voluntary Arbitrator's award exceeded P100,000; basis for the NLRC's dismissal of the Company's appeal.
• Rule 65, Rules of Court — Procedural vehicle for the Company's petition for certiorari to the SC.