MANILA — The Supreme Court (SC) has ruled that voluntary arbitrators can take jurisdiction over a labor dispute only when both parties clearly and mutually agree to submit their case to arbitration, stressing that one party’s consent is insufficient when the other consistently objects.

In a decision penned by Senior Associate Justice Marvic M.V.F. Leonen, the SC’s Second Division held that the panel of voluntary arbitrators had no authority to resolve the monetary claims filed by seafarer Benjie Y. Tandayag against Magsaysay Maritime Corporation. It affirmed that jurisdiction over the case lies with the Labor Arbiter (LA).

Tandayag, who worked as a seafarer for the corporation, suffered a work-related injury onboard a vessel that left him permanently disabled. After the company refused to pay disability and related benefits, he filed a case with the National Conciliation and Mediation Board, which referred the matter to a panel of voluntary arbitrators. There was no collective bargaining agreement (CBA) between the parties.

The parties signed a submission agreement to proceed with arbitration, but the corporation repeatedly objected to the panel’s jurisdiction, arguing that monetary claims should be lodged before the LA. The panel rejected the objection, ruling that the corporation had waived its right to contest jurisdiction by signing the agreement. It ultimately ruled in favor of Tandayag.

The corporation elevated the case to the Court of Appeals (CA), which ruled that the Labor Arbiter—not voluntary arbitrators—has jurisdiction over the dispute. The CA noted that under the Labor Code, voluntary arbitrators handle disputes arising from CBAs.

The SC upheld the CA decision.

It reaffirmed that money claims arising from employer–employee relations must be filed before the LA, consistent with the Labor Code and Republic Act No. 8042 or the Migrant Workers and Overseas Filipinos Act for overseas Filipino workers. Voluntary arbitrators handle disputes involving CBAs, company policies, and other issues that both parties expressly agree to submit to arbitration.

While Tandayag and the panel relied on the submission agreement, the SC found that the corporation had promptly and consistently objected to the panel’s authority, repeatedly insisting that the case belonged before the LA and requesting a ruling on the jurisdiction issue.

The Court emphasized that voluntary arbitration requires clear and unequivocal mutual consent.

“[I]t must be categorical and unequivocal that both parties to the dispute agreed to be bound by the voluntary arbitrator,” the SC said, adding that a submission to arbitration by one party is not enough when the other side consistently objects.