Tandayag vs. Magsaysay Maritime Corporation

In a claim or dispute between a Filipino seafarer and their employer, the continuing and consistent objection of one party to voluntary arbitrators results in the application of the general rule in Republic Act No. 8042, as amended, that labor arbiters have jurisdiction over the claim or dispute. The submission of a claim or dispute by one party to the voluntary arbitrator does not automatically vest the voluntary arbitrator with jurisdiction if the other party interposes a consistent objection to such jurisdiction.

Benjie Tandayag was a Filipino seafarer hired by Magsaysay Maritime Corporation for its foreign principal, Princess Cruise Lines, Ltd., under a nine-month employment contract. The employment contract expressly indicated "NON-CBA" under the provision for collective bargaining agreement, meaning the parties were not covered by any collective bargaining agreement. The applicable legal framework comprised Articles 224, 274, and 275 of the Labor Code, Section 10 of Republic Act No. 8042 (Migrant Workers and Overseas Filipinos Act), as amended by Republic Act No. 10022, and Section 29 of the POEA-SEC (Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers on-board Ocean-Going Ships), which together delineate the respective jurisdictions of labor arbiters and voluntary arbitrators over seafarers' claims.

In 2015, Benjie Tandayag was hired as a laundry steward by Magsaysay Maritime Corporation for its foreign principal, Princess Cruise Lines, Ltd., under a nine-month contract. His employment contract expressly indicated "NON-CBA" under the provision for collective bargaining agreement. While onboard the vessel Caribbean Princess in 2016, Tandayag experienced extreme pain on his left knee. He was examined in Bermuda and was found to have "left leg cellulitis with ruptured popliteal cyst," resulting in his medical repatriation. In the Philippines, Magsaysay Maritime referred him to its designated medical facility, Shiphealth Inc., where he was diagnosed with septic arthritis, requiring a surgical operation and subsequent physical therapy.

Tandayag consulted Dr. Manuel Fidel Magtira, an independent medical expert, who certified that he had a work-sustained injury that rendered him permanently disabled and unfit for further sea duties. Another doctor, orthopedic surgeon Dr. Victor Gerardo Pundavela, also found that he was permanently disabled. With these diagnoses, Tandayag demanded the payment of disability and other related benefits from respondents, which denied his claims. Thus, Tandayag filed with the National Conciliation and Mediation Board a complaint for payment of total and permanent disability benefits, with claims for damages and attorney's fees, against respondents.

The Board referred the case to the Office of the Panel of Voluntary Arbitrators. The Panel's Decision acknowledged the lack of proof of a collective bargaining agreement between petitioner and respondents, stating that "[d]espite several requests, complainant and his counsel refused to provide respondents with the full and complete copy of the alleged CBA which he is allegedly covered under." In finding that it had jurisdiction, the Panel relied on the existence of a submission agreement the parties entered into, citing Article 262 of the Labor Code and Rule IV of the Revised Guidelines in the Conduct of Voluntary Arbitration Proceedings. However, the records showed that respondents had consistently contested and objected to the voluntary arbitrator's jurisdiction throughout the entire proceedings, raising the issue of jurisdiction as early as the joinder of issues before the Panel and continuing to invoke lack of jurisdiction even in their motion for reconsideration.

• Submission Agreement Conferred Jurisdiction: Petitioner argued that, pursuant to Rule IV of the Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings, the absence of a collective bargaining agreement does not automatically divest voluntary arbitrators of jurisdiction, as a submission agreement is sufficient. There being a submission agreement executed by both parties in this case, jurisdiction had already vested in the voluntary arbitrators.
• Correct Ruling on the Merits: Because the Panel had jurisdiction, it correctly ruled on petitioner's claims for disability benefits and damages.

• Lack of Jurisdiction of the Panel: Respondents challenged the jurisdiction of the Office of the Panel of Voluntary Arbitrators from the very beginning, insisting that it is the labor arbiter which has jurisdiction over the case. They continuously invoked the lack of jurisdiction of the Panel over the subject matter of the case, including in their motion for reconsideration.
• Nullity of Panel's Issuances: Since the Panel had no jurisdiction under the circumstances, its issuances were null and void ab initio, as if there were no decision and resolution issued at all, and consequently attained no jural force and consequence.

• Jurisdiction of the Panel of Voluntary Arbitrators: Whether the Office of the Panel of Voluntary Arbitrators had jurisdiction over Tandayag's complaint for permanent and total disability benefits, with claims for damages and attorney's fees.

• Jurisdiction of the Panel of Voluntary Arbitrators: No. The Office of the Panel of Voluntary Arbitrators did not have jurisdiction over the complaint. Because there was no collective bargaining agreement between the parties, and respondents consistently objected to the Panel's jurisdiction, the general rule under Republic Act No. 8042, as amended, that labor arbiters have original and exclusive jurisdiction over seafarers' money claims, prevailed.

• Jurisdiction of the Panel of Voluntary Arbitrators: The Court examined Articles 224, 274, and 275 of the Labor Code, which delineate the respective jurisdictions of labor arbiters and voluntary arbitrators. Under Article 224, labor arbiters have original and exclusive jurisdiction over claims for damages arising from employer-employee relations and all other claims arising from employer-employee relations. Under Article 274, voluntary arbitrators have original and exclusive jurisdiction over unresolved grievances arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies. Under Article 275, voluntary arbitrators may also hear and decide all other labor disputes upon the agreement of the parties.

Section 10 of Republic Act No. 8042, as amended by Republic Act No. 10022, vests original and exclusive jurisdiction over money claims of overseas Filipino workers in the labor arbiters. Section 29 of the POEA-SEC provides that parties covered by a collective bargaining agreement shall submit claims to voluntary arbitration, while parties not covered by a collective bargaining agreement may at their option submit the claim to either the NLRC or the voluntary arbitrator.

The Court distinguished the cases of Ace Navigation Co., Inc. vs. Fernandez and Estate of Dulay vs. Aboitiz Jebsen Maritime, Inc. , wherein there were collective bargaining agreements which vested jurisdiction in the voluntary arbitrators. In this case, there was no collective bargaining agreement between the parties, as plainly indicated in petitioner's contract of employment: "2.4. Collective Bargaining Agreement, if any: NON-CBA." The Panel's Decision similarly acknowledged the lack of proof of a collective bargaining agreement.

The Court held that the Panel erred in relying on the submission agreement to vest itself with jurisdiction. A scrutiny of the records showed that respondents had consistently contested and objected to the voluntary arbitrator's jurisdiction throughout the entire proceedings, raising the issue as early as the joinder of issues before the Panel. The Panel erred in holding that the submission agreement constituted a waiver of the objection of lack of jurisdiction, when an issue expressly included for the Panel's resolution was its own jurisdiction.

The Court further held that the Panel incorrectly stated that Rule IV of the Revised Guidelines in the Conduct of Voluntary Arbitration Proceedings vested it with jurisdiction. There is a difference between jurisdiction and the exercise thereof: jurisdiction over the subject matter of a case is conferred by law, whereas a court's exercise of jurisdiction is governed by the Rules of Court or by orders issued from time to time by the Court. Citing Vivero vs. Court of Appeals, the Court noted that the voluntary—or consensually agreed-upon—nature of voluntary arbitration cannot be so lightly set aside; it must be categorical and unequivocal that both parties to the dispute agreed to be bound by the voluntary arbitrator.

The second paragraph of Section 29 of the POEA-SEC must be read in such a way that both parties have to have agreed to the submission of the claim or dispute to, and therefore be bound to the jurisdiction of, either the labor arbiter or the voluntary arbitrator. In claims or disputes between an overseas Filipino worker and their employer, the submission of the claim or dispute by one party to the voluntary arbitrator does not automatically vest the voluntary arbitrator with jurisdiction, if the other party interposes a consistent objection to such jurisdiction. In these instances, the general rule on the jurisdiction of the labor arbiter under Republic Act No. 8042, as amended, shall prevail.

• Consensual Nature of Voluntary Arbitration — Voluntary arbitration is consensual in nature; both parties must categorically and unequivocally agree to be bound by the voluntary arbitrator. The Court applied this doctrine in holding that one party's unilateral submission to voluntary arbitration does not vest jurisdiction when the other party consistently objects, citing Vivero vs. Court of Appeals which emphasized that the voluntary nature of voluntary arbitration cannot be so lightly set aside.

• Jurisdiction vs. Exercise of Jurisdiction — Jurisdiction over the subject matter of a case is conferred by law, whereas a court's exercise of jurisdiction, unless provided by the law itself, is governed by the Rules of Court or by orders issued from time to time by the Court. The Court applied this distinction in rejecting the Panel's reliance on Rule IV of the Revised Guidelines, which merely enumerated conditions for the exercise of jurisdiction, not the conferment of jurisdiction itself.

• Estoppel by Laches in Jurisdiction Questions — Among the requirements for a finding of estoppel by laches in questions of jurisdiction is that the invoking party failed to raise the statutory right, and the party let an unreasonable amount of time lapse before questioning the jurisdiction of the court or tribunal. The Court held that estoppel by laches could not apply because respondents raised the issue of the voluntary arbitrator's jurisdiction as early as the joinder of issues before the Panel.

• "In a claim or dispute between a Filipino seafarer and their employer, the continuing and consistent objection of one party to voluntary arbitrators shall result in the application of the general rule in Republic Act No. 8042, as amended, that labor arbiters have jurisdiction over the claim or dispute." — This is the Court's core holding, articulating the controlling principle that resolves the jurisdictional conflict between labor arbiters and voluntary arbitrators in seafarer claims.

• "In claims or disputes between an overseas Filipino worker and their employer, the submission of the claim or dispute by one party to the voluntary arbitrator does not automatically vest the voluntary arbitrator with jurisdiction, if the other party interposes a consistent objection to such jurisdiction. In these instances, the general rule on the jurisdiction of the labor arbiter under Republic Act No. 8042, as amended, shall prevail." — This passage states the ratio decidendi, clarifying that the option to submit to voluntary arbitration under Section 29 of the POEA-SEC requires mutual agreement of both parties.

• "As a basic premise, let it be emphasized that a court's acquisition of jurisdiction over a particular case's subject matter is different from incidents pertaining to the exercise of its jurisdiction. Jurisdiction over the subject matter of a case is conferred by law, whereas a court's exercise of jurisdiction, unless provided by the law itself, is governed by the Rules of Court or by orders issued from time to time by the Court." — This quotation, cited from Gonzales vs. GJH Land, Inc. , distinguishes jurisdiction from its exercise and was used to reject the Panel's reliance on procedural rules to confer jurisdiction.

• Estate of Dulay vs. Aboitiz Jebsen Maritime, Inc., 687 Phil. 153 (2012) — Distinguished. The Court clarified that while claims of overseas Filipino workers are generally within labor arbiters' jurisdiction, disputes stemming from interpretation or implementation of collective bargaining agreements fall under Article 274 of the Labor Code. Distinguished because there was no CBA in the present case.

• Ace Navigation Co., Inc. vs. Fernandez, 697 Phil. 250 (2012) — Distinguished. The Court held that voluntary arbitrators had original and exclusive jurisdiction over a seafarer's disability claim where the parties were covered by a CBA. Distinguished because the present case involved no CBA.

• Vivero vs. Court of Appeals, 398 Phil. 158 (2000) — Followed. The Court cited this case for the principle that voluntary arbitration is mandatory only if there is a specific agreement between the parties to that effect, and that the use of the word "may" in the applicable provision shows the intention of the parties to reserve the right of recourse to labor arbiters.

• Amoguis vs. Ballado, 839 Phil. 1 (2018) — Cited for the requirements of estoppel by laches in questions of jurisdiction, specifically that the invoking party failed to raise the statutory right and let an unreasonable amount of time lapse before questioning jurisdiction.

• Gonzales vs. GJH Land, Inc., 772 Phil. 483 (2015) — Cited for the distinction between jurisdiction over the subject matter and the exercise of jurisdiction, emphasizing that jurisdiction is conferred by law while its exercise is governed by procedural rules.

• Article 224 (217), Labor Code — Provides that labor arbiters shall have original and exclusive jurisdiction over claims for damages arising from employer-employee relations and all other claims arising from employer-employee relations. Applied to establish the general rule that labor arbiters have jurisdiction over seafarers' money claims.

• Article 274 (261), Labor Code — Provides that voluntary arbitrators have original and exclusive jurisdiction over unresolved grievances arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies. Applied to determine that the Panel lacked jurisdiction absent a CBA.

• Article 275 (262), Labor Code — Provides that voluntary arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. Applied to require mutual agreement of both parties before voluntary arbitrators can assume jurisdiction over non-CBA disputes.

• Section 10, Republic Act No. 8042, as amended by Republic Act No. 10022 — Vests original and exclusive jurisdiction in labor arbiters over claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment, including claims for damages. Applied as the general rule that prevailed due to respondents' consistent objection to voluntary arbitration.

• Section 29, POEA-SEC — Governs dispute settlement procedures for seafarers, providing that parties covered by a CBA shall submit claims to voluntary arbitration, while parties not covered by a CBA may at their option submit to either the NLRC or voluntary arbitration. Interpreted to require that both parties must agree to the submission of the claim to either forum.

Lazaro-Javier, M. Lopez, and Kho, Jr., JJ., concurred. J. Lopez, J., was on official business.