Negros Metal Corp. vs. Lamayo, August 25, 2010

Facts:
Armelo J. Lamayo began working for Negros Metal Corporation as a machinist. Sometime in May 2002, while Lamayo was at the company's foundry grinding some tools he was using, the company manager, called his attention why he was using the grinder there to which he replied that since the machine there  was bigger, he would finish his work faster. Lamayo's explanation was found unsatisfactory, hence, he was, via memorandum, charged of loitering and warned.
 
Taking the warning as a three-day suspension as penalized under company rules, Lamayo reported for work after three days, only to be meted with another 10-day suspension. After serving the second suspension, Lamayo reported for work but was informed that his services had been terminated and that he should draft his resignation letter. Thus, Lamayo filed a complaint for illegal dismissal before the Labor Arbiter however it was opposed by Negros Metal contending that the complaint should be dismissed because the Labor Arbiter had no jurisdiction over it since, under their Collective Bargaining Agreement (CBA), such matters must first be brought before the company's grievance machinery.

Issue:
Whether the Labor Arbiter has jurisdiction over the dispute.

​Held: 
Yes. Under Art. 217 of the Labor Code, it is clear that a labor arbiter has original and exclusive jurisdiction over termination disputes. On the other hand, under Article 261, a voluntary arbitrator has original and exclusive jurisdiction over grievances arising from the interpretation or enforcement of company policies. As a general rule then, termination disputes should be brought before a labor arbiter, except when the parties, under Art. 262, unmistakably express that they agree to submit the same to voluntary arbitration.
In the present case, the CBA provision on grievance machinery being invoked by petitioner does not expressly state that termination disputes are included in the ambit of what may be brought before the company's grievance machinery.  Thus, the matter of suspension of an employee was under the original and exclusive jurisdiction of the labor arbiter.