LABOR ARBITER

1. THE LABOR ARBITER.

The Labor Arbiter is an official in the Arbitration Branch of the National Labor Relations
Commission (NLRC) who hears and decides cases falling under his original and exclusive
jurisdiction as provided by law.

2. LABOR ARBITERS HAVE NO INJUNCTIVE POWER; ONLY THE COMMISSION (NLRC)

HAS THIS POWER.
Previously, Labor Arbiters are possessed of injunctive power. This grant of injunctive power,
however, was deleted in recent NLRC Rules. The Labor Arbiter thus has no more injunctive
power. Only the Commission (NLRC) has that power.

JURISDICTION OF THE LABOR ARBITER

1. NATURE OF JURISDICTION OF LABOR ARBITERS - ORIGINAL AND EXCLUSIVE.

The jurisdiction conferred by Article 224 [217] upon the Labor Arbiters is both original and
exclusive, meaning, no other officers or tribunals can take cognizance of, or hear and decide,
any of the cases therein enumerated.

2. EXCEPTIONS TO THE ORIGINAL AND EXCLUSIVE JURISDICTION OF LABOR

ARBITERS.
The following cases are the exceptions when the Labor Arbiters may not exercise their original
and exclusive jurisdiction:
1. In assumed cases. When the DOLE Secretary or the President exercises his power
under Article 278(g) [263(g)] of the Labor Code to assume jurisdiction over national
interest cases and decide them himself.
2. In certified cases. When the NLRC exercises its power of compulsory arbitration over
similar national interest cases that are certified to it by the DOLE Secretary pursuant to
the exercise by the latter of his certification power under the same Article 278(g)
[263(g)].
3. In cases arising from CBA. - When cases arise from the interpretation or
implementation of collective bargaining agreements and from the interpretation or
enforcement of company personnel policies which shall be disposed of by the Labor
Arbiter by referring the same to the grievance machinery and voluntary arbitration, as
may be provided in said agreements.
4. In cases submitted for voluntary arbitration. - When the parties agree to submit the
case to voluntary arbitration before a Voluntary Arbitrator or panel of Voluntary
Arbitrators who, under Articles 274 [261] and 275 [262] of the Labor Code, are also
possessed of original and exclusive jurisdiction to hear and decide cases mutually
submitted to them by the parties for arbitration and adjudication.

3. RUNDOWN OF ALL CASES FALLING UNDER THE JURISDICTION OF THE LABOR

ARBITERS.
More particularly, Labor Arbiters shall have original and exclusive jurisdiction to hear and decide
the following cases involving all workers, whether agricultural or non-agricultural:
Under Article 224 [217] of the Labor Code:
(a) Unfair labor practice (ULP) cases;
(b) Termination disputes (Illegal dismissal cases);
(c) Money claims exceeding P5,000.00.
(d) Claims for actual, moral, exemplary and other forms of damages arising from
employer-employee relations; and
(e) Cases involving the legality of strikes and lockouts.

A. UNFAIR LABOR PRACTICE (ULP)

NATURE, ASPECTS
1. WHEN AN ACT CONSTITUTES ULP.
At the outset, it must be clarified that not all unfair acts constitute ULPs. While an act or
decision of an employer or a union may be unfair, certainly not every unfair act or decision
thereof may constitute ULP as defined and enumerated under the law. The act complained of as
ULP must have a proximate and causal connection with any of the following 3 rights:
1. Exercise of the right to self-organization;
2. Exercise of the right to collective bargaining; or
3. Compliance with CBA.
Sans this connection, the unfair acts do not fall within the technical signification of the term
“unfair labor practice.”

2. PARTIES WHO/WHICH MAY COMMIT ULP.

A ULP may be committed by an employer or by a labor organization. Article 259 [248] describes
the ULPs that may be committed by an employer; while Article 260 [249] enumerates those
which may be committed by a labor organization.

On the part of the employer, only the officers and agents of corporations, associations or
partnerships who have actually participated in or authorized or ratified ULPs are criminally
liable.

On the part of the union, only the officers, members of governing boards, representatives or
agents or members of labor associations or organizations who have actually participated in or
authorized or ratified the ULPs are criminally liable.

3. ELEMENTS OF ULP.
1. There should exist an employer-employee relationship between the offended party and the
offender; and
2. The act complained of must be expressly mentioned and defined in the Labor Code as an
unfair labor practice.

Absent one of the elements aforementioned will not make the act an unfair labor practice.

4. ASPECTS OF ULP.
Under Article 258 [247], a ULP has two (2) aspects, namely:
1. Civil aspect; and
2. Criminal aspect.
The civil aspect of an unfair labor practice includes claims for actual, moral and exemplary
damages, attorney’s fees and other affirmative reliefs. Generally, these civil claims should be
asserted in the labor case before the Labor Arbiters who have original and exclusive
jurisdiction over unfair labor practices. The criminal aspect, on the other hand, can only be
asserted before the regular court.

B. JURISDICTION OVER ILLEGAL DISMISSAL CASES

1. PRINCIPLES ON JURISDICTION OVER TERMINATION CASES.

_ The validity of the exercise of jurisdiction by Labor Arbiters over illegal dismissal cases is not
dependent on the kind or nature of the ground cited in support of the dismissal; hence,
whether the dismissal is for just cause or authorized cause, it is of no consequence.

C. JURISDICTION OVER MONEY CLAIMS CASES

1. CLASSIFICATION OF MONEY CLAIMS.

Money claims falling within the original and exclusive jurisdiction of the Labor Arbiters may be
classified as follows:
1. Any money claim, regardless of amount, when asserted in an illegal dismissal case
(where the remedy of reinstatement is proper). Here, the money claim is but an
accompanying remedy subordinated to the principal cause of action, i.e., illegal dismissal; or
2. Any money claim exceeding the amount of ₱5,000.00 per claimant. If the amount does not
exceed ₱5,000.00, it is, under Article 129, the DOLE Regional Director who has jurisdiction to
take cognizance thereof. Therefore, the amount of ₱5,000.00 becomes important only when the
principal cause of action is MONETARY CLAIM.

3. SOME PRINCIPLES ON JURISDICTION OVER MONEY CLAIMS.

_ Award of statutory benefits even if not prayed for is valid.
_ Claim for notarial fees by a lawyer employed by a company is within the jurisdiction of the
Labor Arbiter.

D. JURISDICTION OVER CLAIMS FOR DAMAGES

1. LABOR ARBITERS HAVE JURISDICTION OVER CLAIMS FOR DAMAGES.

It is now a well-settled rule that claims for damages as well as attorney’s fees in labor cases are
cognizable by the Labor Arbiters, to the exclusion of all other courts. Rulings to the contrary are
deemed abandoned or modified accordingly.

2. CLAIMS FOR DAMAGES OF OVERSEAS FILIPINO WORKERS (OFWs).

Claims for actual, moral, exemplary and other forms of damages that may be lodged by
overseas Filipino workers are cognizable by the Labor Arbiters.

Note: OFW-RELATED CASES OVER WHICH THE POEA, AND NOT THE LABOR
ARBITERS, HAS JURISDICTION.
The Philippine Overseas Employment Administration (POEA) has original and exclusive
jurisdiction to hear and decide:
(a) All cases which are administrative in character, involving or arising out of violation of rules
and regulations relating to licensing and registration of recruitment and employment agencies or
entities, including refund of fees collected from workers and violation of the conditions for the
issuance of license to recruit workers.
(b) Disciplinary action cases and other special cases which are administrative in character,
involving employers, principals, contracting partners and Filipino migrant workers.

No. 1 above covers recruitment violations or violations of conditions of license; while No. 2
above involves (a) disciplinary action cases against foreign principals or employers, and (a)
disciplinary action cases against land-based OFWs and seafarers.

OTHER ISSUES OVER WHICH LABOR ARBITERS HAVE JURISDICTION

1. JURISDICTION OVER CERTAIN ISSUES AS PROVIDED IN JURISPRUDENCE.
In accordance with well-entrenched jurisprudence, the issues, claims or cases of the following
fall under the jurisdiction of the Labor Arbiters:
(a) Employees in government-owned and/or controlled corporations;
(b) Alien parties;
(c) Priests and ministers;
(d) Employees of cooperatives;
(e) Counter-claims of employers against employees.

X-1. JURISDICTION OVER CASES INVOLVING EMPLOYEES OF GOVERNMENT-OWNED

AND/OR CONTROLLED CORPORATIONS

1. PREVAILING RULE.
The hiring and firing of employees of government owned and/or controlled corporations without
original charters are covered by the Labor Code and, therefore, the Labor Arbiters have
jurisdiction over illegal dismissal and other cases that may be filed under this law; while those
with original charters are basically governed by the Civil Service Law, rules and regulations and,
therefore, jurisdiction on any of the cases that may be initiated under this law is vested in the
Civil Service Commission (CSC)

X-2. JURISDICTION OVER DISPUTES INVOLVING ALIEN PARTIES

1. CHOICE OF LAW BY PARTIES.

A basic policy of contract is to protect the expectations of the parties. Such party expectations
are protected by giving effect to the parties’ own choice of the applicable law.3 The choice of
law must, however, bear some relationship to the parties or their transaction.4 A manning
agency, for instance, cannot be faulted for complying with the applicable foreign law. By so
complying, it has discharged its monetary obligation to the employee.5

2. WHEN PHILIPPINE LAW PREVAILS.

Pakistan International Airlines Corporation v. Ople, Sept. 28, 1990.

_ Two contracts of employment were executed in Manila between Pakistan International Airlines
Corporation and two Filipino flight attendants.
_ Paragraph 10 of the contracts provides:
----- The terms thereof shall be construed and governed by the laws of Pakistan; and
----- Only the courts of Karachi, Pakistan shall have jurisdiction to consider any matter arising
out of or under the agreement.
_ They were dismissed prior to expiration of contracts.

ISSUE: Which law should apply and which court has jurisdiction over the dispute.

HELD: Philippine law should apply and that the Philippine court has jurisdiction:
Philippine labor laws and regulations apply to the subject matter of this case, i.e., the
employer-employee relationship between petitioner PIA and private respondents. The
relationship is much affected with public interest and cannot be subject of agreement that what
should apply thereto should be some other law.

Philippine court has jurisdiction because:

_ The contract was executed and performed partially in the Philippines;
_ Private respondents are Philippine citizens and residents and based in the Philippines in
between their assigned flights to the Middle East and Europe.
_ Petitioner, although a foreign corporation, is licensed to do business (and is actually doing
business in the Philippines) and hence, is a resident in the Philippines.

X-3. JURISDICTION OVER LABOR CASES INVOLVING PRIESTS AND MINISTERS

1. WHEN LABOR ARBITERS HAVE JURISDICTION.

The fact that a case involves as parties thereto the church and its religious minister does not
ipso facto give the case a religious significance. If what is involved is a labor case, say illegal
dismissal, the relationship of the church, as employer, and the priest or minister, as employee is
a purely secular matter not related to the practice of faith, worship or doctrines of the church.
Hence, Labor Arbiters may validly exercise jurisdiction over said labor case. The religious
minister in Austria v. Hon. NLRC, was not excommunicated or expelled from the membership of
the church but was terminated from employment based on the just causes provided in Article
297 [282] of the Labor Code. Indeed, the matter of terminating an employee which is purely
secular in nature is different from the ecclesiastical act of expelling a member from the religious
congregation. As such, the State, through the Labor Arbiter and the NLRC, has the right to take
cognizance of the case to determine whether the church, as employer, rightfully exercised its
management prerogative to dismiss the religious minister as its employee.

2. ECCLESIASTICAL AFFAIR, MEANING.

An “ecclesiastical affair” is one that concerns doctrine, creed, or form of worship of the church,
or the adoption and enforcement within a religious association of needful laws and regulations
for the government of its membership, and the power of excluding from such association those
deemed unworthy of membership. Based on this definition, an ecclesiastical affair involves the
relationship between the church and its members and relates to matters of faith, religious
doctrines, worship and governance of the congregation. To be concrete, examples of these so-
called ecclesiastical affairs to which the State cannot meddle, are proceedings for
excommunication, ordination of religious ministers, administration of sacraments and other
activities with attached religious significance.

X-4. JURISDICTION OVER CASES OF EMPLOYEES OF COOPERATIVES

1. EMPLOYERS MAY ASSERT COUNTER-CLAIMS AGAINST EMPLOYEES FILED BY THE

LATTER BEFORE THE LABOR ARBITERS.
Almost all labor cases decided by labor courts involve claims asserted by the workers. The
question that may be propounded is whether the employers can assert counter-claims against
their employees before the Labor Arbiters. The Supreme Court answered this poser in the
affirmative.

Banez v. Hon. Valdevilla. - The jurisdiction of Labor Arbiters and the NLRC is comprehensive
enough to include claims for all forms of damages “arising from the employer-employee
relations.” By this clause, Article 217 should apply with equal force to the claim of an employer
for actual damages against its dismissed employee, where the basis for the claim arises from or
is necessarily connected with the fact of termination, and should be entered as a counter-claim
in the illegal dismissal case. This is in accord with paragraph 6 of Article 217(a), which covers
“all other claims, arising from employer-employee relations.”

But such counter-claim, being a factual issue, must be asserted before the Labor Arbiter;
otherwise, it can no longer be passed upon by a reviewing court.

ISSUES AND CASES OVER WHICH LABOR ARBITERS HAVE NO JURISDICTION

1. LABOR ARBITERS HAVE NO JURISDICTION OVER CERTAIN ISSUES AND CASES.
The following issues or cases do not fall under the jurisdiction of Labor Arbiters:
(a) Claims for damages arising from breach of a non-compete clause and other post-
employment prohibitions;
(b) Claims for payment of cash advances, car, appliance and other loans of employees;
(c) Dismissal of corporate officers and their monetary claims;
(d) Cases involving entities immune from suit;
(e) Cases falling under the doctrine of forum non conveniens;
(f) Quasi-delict or tort cases;
(g) Criminal and civil liabilities arising from violations of certain provisions of the Labor Code;
(h) Constitutionality of CBA provisions.