Philippine Labor Law Glossary
Definition: Voluntary arbitration is a labor-dispute process in which the parties select an impartial voluntary arbitrator or panel to decide the submitted issues, with an award that is final, executory and binding subject to limited judicial review.
Sa Filipino · Filipino Explanation
Ano ang voluntary arbitration?
Ang voluntary arbitration ay prosesong pang-labor dispute kung saan pumipili ang mga panig ng walang kinikilingang voluntary arbitrator o panel na magpapasya sa mga isyung isinumite. Ang award nito ay final, executory at binding, na napapailalim sa limitadong judicial review.
Ito ang huling hakbang para sa mga hindi naresolbang isyu sa ilalim ng grievance machinery.
What Voluntary Arbitration Means
Voluntary arbitration is the terminal step for unresolved grievances arising from CBA interpretation or implementation and from the interpretation or enforcement of company personnel policies within the statutory scope.
The parties may name an arbitrator in the CBA, agree on a selection procedure or obtain NCMB assistance. By agreement, they may also submit other labor disputes to voluntary arbitration where allowed by law.
Core Legal Rules
- The grievance machinery should ordinarily be exhausted for disputes that must pass through the CBA process.
- The submission agreement or CBA determines the issues and the arbitrator’s authority.
- Voluntary arbitrators have original and exclusive jurisdiction over unresolved grievances assigned by the Labor Code.
- The award is final, executory and binding, although courts may review it on limited legal grounds through the proper remedy.
- The parties should preserve the CBA, grievance records, submission agreement and evidence presented.
Evidence That May Matter
| Evidence | Why it matters |
|---|---|
| CBA arbitration clause | Shows the agreed arbitrator-selection method and covered disputes. |
| Grievance records | Establish exhaustion of the agreed internal process. |
| Submission agreement | Defines the precise issues submitted for decision. |
| Position papers and exhibits | Contain the factual and legal evidence considered by the arbitrator. |
| Arbitral award and proof of receipt | Establish the ruling, service date and compliance deadlines. |
Why the Term Matters
Filing in the wrong forum can delay resolution. Parties should identify whether the dispute belongs to a labor arbiter, DOLE office, grievance machinery or voluntary arbitrator before filing.
Practical Example
Hypothetical example: A union and employer cannot resolve a dispute over the interpretation of a CBA retirement provision. After completing the grievance steps, they submit the issue to the designated voluntary arbitrator for a binding award.
Common Misunderstanding
Misunderstanding: Voluntary arbitration means the decision is merely advisory because the parties voluntarily selected the process.
Correct approach: Once properly submitted, the arbitrator has authority to decide the issue and the award is final and binding, subject to limited legal review.
Related Glossary Terms
- Grievance Machinery
- Collective Bargaining Agreement
- Conciliation
- Labor Arbiter
- National Labor Relations Commission
Sources and Legal Citations
- Book V — Labor Relations, Labor Code of the Philippines — Official source.
- NCMB Voluntary Arbitration Program — Official source.
- DOLE Department Order No. 40-03, as amended — Official source.
Sources rechecked as of: August 6, 2026
Disclaimer
This glossary entry is for general educational and legal-information purposes and is not legal advice. Labor disputes depend on specific facts and current law. LaborCode.ph is independent and is not a government website, tribunal or law firm.