Quick answer

Voluntary arbitration is a mode of settling labor disputes in which the parties submit their dispute to an impartial third person, the voluntary arbitrator (or a panel), whose decision they agree to accept, rather than to the compulsory processes of the labor arbiters of the NLRC. It is closely tied to collective bargaining. Under the Labor Code, the voluntary arbitrator has original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the collective bargaining agreement (CBA), and those arising from the interpretation or enforcement of company personnel policies, once these have gone through the grievance machinery without resolution. The parties may also, by agreement, submit other labor disputes to voluntary arbitration, and the law encourages this as a preferred mode of dispute settlement. The typical flow in an organized establishment is: a grievance is first processed through the grievance machinery established in the CBA (a step-by-step internal procedure); if it remains unresolved, it is referred to voluntary arbitration. The voluntary arbitrator is selected by the parties (from a list or by their agreement), and the National Conciliation and Mediation Board assists. The award or decision of a voluntary arbitrator is final and executory after a short period (generally ten calendar days from receipt), and is reviewable only by the Court of Appeals through a petition for review under the rules, and not by ordinary appeal to the NLRC. So voluntary arbitration resolves CBA and personnel-policy grievances (and other agreed disputes) through a party-chosen arbitrator whose decision is final, distinguishing it from the compulsory arbitration of the NLRC.

What Voluntary Arbitration Is

Voluntary arbitration submits a labor dispute to an impartial voluntary arbitrator the parties choose, whose decision they agree to accept — instead of the NLRC's compulsory process.

The Arbitrator's Jurisdiction

The voluntary arbitrator has original and exclusive jurisdiction over unresolved CBA grievances and disputes on company personnel policies, once they pass through the grievance machinery. Parties may also agree to submit other disputes.

Grievance Flow and Finality

A grievance is first processed through the CBA grievance machinery; if unresolved, it goes to voluntary arbitration (the NCMB assists). The award is final and executory after a short period (generally 10 days), reviewable only by the Court of Appeals, not the NLRC.

Practical Takeaways

Frequently Asked Questions

What is voluntary arbitration? A mode of settling labor disputes where the parties submit their dispute to an impartial voluntary arbitrator whose decision they agree to accept, rather than to the compulsory arbitration of the NLRC.

What disputes fall under voluntary arbitration? Unresolved grievances arising from the interpretation or implementation of the CBA and those arising from company personnel policies, once processed through the grievance machinery, plus other disputes the parties agree to submit.

How is a grievance resolved in a unionized company? It is first processed through the grievance machinery in the CBA. If it remains unresolved, it is referred to voluntary arbitration before a party-chosen arbitrator, with the NCMB assisting.

Is a voluntary arbitrator's decision final? The award is final and executory after a short period, generally ten calendar days from receipt, and is reviewable only by the Court of Appeals through a petition for review, not by appeal to the NLRC.

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.

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