Voluntary arbitration is a mode of settling labor disputes in which the parties submit their dispute to a voluntary arbitrator (or panel) whose decision is final and binding, rather than to the labor arbiter and the NLRC. Voluntary arbitrators have original and exclusive jurisdiction over disputes arising from the interpretation or implementation of a collective bargaining agreement (CBA) and from the interpretation or enforcement of company personnel policies that remain unresolved after the grievance procedure. By agreement, the parties may also submit other labor disputes to voluntary arbitration. A voluntary arbitrator's award is generally final and executory after a short period, and is reviewable only in a limited way. It is favored because it is faster, less adversarial, and keeps disputes within the parties' own chosen process.
Not every labor dispute goes to the NLRC. Many — especially those arising from a union contract — are decided by a voluntary arbitrator.
What Voluntary Arbitration Is
Voluntary arbitration is a mode of settling labor disputes in which the parties submit their dispute to a voluntary arbitrator (or a panel) whose decision is final and binding. It is a form of the parties choosing their own adjudicator instead of litigating before the labor arbiter and NLRC.
What It Covers
Voluntary arbitrators have original and exclusive jurisdiction over:
- Disputes arising from the interpretation or implementation of a CBA; and
- Disputes arising from the interpretation or enforcement of company personnel policies,
that remain unresolved after exhausting the grievance procedure. In addition, by agreement, the parties may submit other labor disputes — even some that would otherwise go to the labor arbiter — to voluntary arbitration.
The Grievance Machinery Comes First
For CBA and personnel-policy disputes, the parties must first go through the grievance procedure set up in the CBA. Only unresolved grievances are elevated to voluntary arbitration. This keeps most day-to-day disputes at the shop-floor level.
Finality of the Award
A voluntary arbitrator's award or decision is generally final and executory after a short period from receipt by the parties. Judicial review is limited — it is not a full re-trial — which gives voluntary arbitration its speed and finality. Enforcement can be pursued if a party does not comply.
Why It Is Favored
Voluntary arbitration is promoted by law and policy because it is:
- Faster than ordinary litigation;
- Less adversarial, preserving the working relationship; and
- Party-chosen — the parties pick the arbitrator and keep control of the process.
Voluntary Arbitration vs. the NLRC
- Voluntary arbitration — party-chosen arbitrator; CBA and personnel-policy disputes (and others by agreement); final award with limited review; while
- The NLRC/labor arbiter — the compulsory-arbitration track for illegal dismissal, money claims, and other statutory labor disputes.
Practical Takeaways
- Voluntary arbitration resolves CBA and personnel-policy disputes unresolved after the grievance procedure — and other disputes by agreement;
- The award is final and binding with only limited review;
- It is favored for being faster, less adversarial, and controlled by the parties.
Frequently Asked Questions
What is voluntary arbitration? A mode of settling labor disputes where the parties submit their dispute to a voluntary arbitrator whose decision is final and binding, instead of litigating before the labor arbiter and NLRC.
What disputes does a voluntary arbitrator handle? Original and exclusive jurisdiction over disputes on the interpretation or implementation of a CBA and the enforcement of company personnel policies, unresolved after the grievance procedure, plus other disputes the parties agree to submit.
Is a voluntary arbitrator's decision final? Yes. The award is generally final and executory after a short period, and judicial review is limited rather than a full re-trial, which gives voluntary arbitration its speed and finality.
How is voluntary arbitration different from the NLRC? Voluntary arbitration uses a party-chosen arbitrator for CBA and personnel-policy disputes and others by agreement. The NLRC and labor arbiter form the compulsory-arbitration track for illegal dismissal, money claims, and other statutory disputes.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
If you have questions about your rights or options under Philippine law, our firm is available to assist. You may reach us via Viber or WhatsApp, call us at 0995 433 5550, or send an email to vivasnobles@gmail.com. We look forward to hearing from you.