2015 Labor Law, Q20

A. XYZ Company and Mr. AB, a terminated employee who also happens to be the President of XYZ Employees Union, agree in writing to submit Mr. AB’s illegal dismissal case to voluntary arbitration. Is this agreement a valid one? (3%)
B. XYZ Company and XYZ Employees Union (XYZEU) reach a deadlock in their negotiation for a new collective bargaining agreement (CBA). XYZEU files a notice of strike; XYZ Company proposes to XYZEU that the deadlock be submitted instead to voluntary arbitration. If you are counsel for XYZEU, what advice would you give the union as to the: (1) propriety of the request of XYZ Company, and (2) the relative advantages/disadvantages between voluntary arbitration and compulsory arbitration? (4%)

Quick check

Is a written agreement between an employer and a terminated employee to submit an illegal dismissal case to voluntary arbitration legally valid?

What is the legal status of an employer's proposal to submit a CBA bargaining deadlock to voluntary arbitration after a notice of strike is filed?

Which of the following is a key advantage of voluntary arbitration over compulsory arbitration in resolving collective bargaining deadlocks?

How does compulsory arbitration differ from voluntary arbitration in labor dispute resolution?

Choices available with full access.

What is the primary effect of submitting a labor dispute to voluntary arbitration upon written agreement of the parties?

Choices available with full access.

Unlock the full Labor Law answers

Learn more about these topics

1. Voluntary Arbitration Jurisdiction
Under Article 275 of the Labor Code, voluntary arbitrators possess jurisdiction to hear and decide all labor disputes, including unfair labor practices, bargaining deadlocks, and illegal dismissal cases, upon agreement of the parties. Although termination cases originally fall under the jurisdiction of the Labor Arbiter under Article 224, parties may validly submit an illegal dismissal dispute to voluntary arbitration through a written submission agreement. Voluntary arbitration is recognized and encouraged by the Constitution as a preferred consensual mode of settling industrial labor controversies.

2. CBA Deadlock Arbitration
A collective bargaining deadlock arises when the employer and the bargaining union reach an impasse in negotiations for a new collective bargaining agreement. While filing a notice of strike is a statutory remedy available to the union, proposing to submit the deadlock to voluntary arbitration is legal and highly proper under labor rules. Voluntary arbitration avoids economic disruptions caused by strikes and lockouts, providing a peaceful and binding resolution of interest disputes before a mutually selected impartial arbitrator.

3. Arbitration Modes Compared
Voluntary and compulsory arbitration differ primarily in tribunal selection and procedural nature. In voluntary arbitration, parties mutually choose their arbitrator and agree on the issues, producing an expeditious and less adversarial resolution. In contrast, compulsory arbitration involves state-mandated dispute resolution by administrative bodies such as the National Labor Relations Commission. While voluntary arbitration awards are final and binding, compulsory arbitration proceedings often involve formal litigation procedures, strict technical rules, and prolonged appellate reviews before higher courts.

About these questions and answers
The questions reproduced here are the official texts of the Philippine Bar Examinations, published by the Supreme Court. They are reproduced for study purposes.The suggested answers are the author’s own.

They are not official answers, have no connection with the Supreme Court, the Office of the Bar Confidant, or any bar review institution, and are not endorsed by any of them. Official answer keys, where released, should be preferred over anything here.Nothing on this page is legal advice, and reading it creates no lawyer-client relationship. Do not rely on any suggested answer in an actual legal matter. Consult counsel on your own facts.Suggested answers reflect the law and jurisprudence the author considers applicable as of the date shown.

Where a question comes from an earlier examination, the suggested answer applies the law as it now stands, which may differ from the law in force when the question was given, and may therefore differ from what would have been the correct answer at that time. Where the difference is material, the answer notes it.The practice scoring feature measures wording overlap with the suggested answer. It is not a grade, carries no official weight, and says nothing about whether your reasoning is sound.Errors are possible. If you find one, please tell me and I will correct it.Last reviewed: October 2026