G.R. No. 142843 - Alvarez vs. Court of Appeals

Respondent Eddie Albarico started working for petitioner 7K Corporation in 1990 as a salesman.
Due to his good performance, his employment was regularized and he received several promotions—from salesman to senior sales representative and then to acting team field supervisor.
In 1992, he was recognized as one of the company’s top water purifier specialist distributors through the awarding of the Presidentas Trophy.

On 5 April 1993, petitioner 7K Corporation terminated respondent’s employment, alleging poor sales performance.
Petitioner claimed that Albarico had voluntarily stopped reporting for work following a verbal reprimand, thus suggesting abandonment of employment.
In contrast, respondent maintained that the termination was wrongful and amounted to illegal dismissal.

Following his termination, respondent submitted his money claims for arbitration before the National Conciliation and Mediation Board (NCMB) based on a Submission Agreement dated 19 April 1993.
The Submission Agreement specifically designated the issues for arbitration: whether he was entitled to separation pay and the sales commission earned before his termination.

While the NCMB arbitration case was pending, respondent filed a separate Complaint with the Arbitration Branch of the National Labor Relations Commission (NLRC) for illegal dismissal and additional money claims (overtime pay, holiday compensation, commission, food, and travelling allowances).
A labor arbiter ruled in favor of respondent, awarding separation pay in lieu of reinstatement, backwages, and attorney’s fees.
Petitioner’s appeal led the NLRC to vacate the labor arbiter’s decision on the basis of forum shopping, noting that the NCMB’s arbitration case was still pending.
The NLRC Decision, acknowledging that the dismissal issue should not prejudice the pending NCMB case, eventually became final after no appeal was taken.

On 17 September 1997, petitioner filed its Position Paper in the NCMB arbitration, denying that respondent was terminated or illegally dismissed, instead alleging abandonment of employment.
Respondent, in turn, reiterated in his oral manifestation the claim of illegal dismissal as stated in his earlier position paper submitted to the labor arbiter.
A hearing was held on 12 January 2005, during which both parties expressed willingness to settle, although their settlement parameters differed (respondent sought recognition of illegal dismissal versus petitioner’s position restricting the award to the Submission Agreement issues).

On 18 November 2005, the NCMB voluntary arbitrator rendered a Decision finding petitioner liable for illegal dismissal.
The decision was based on several factual findings:

The promotion, salary increases, and awards received by respondent contradicted the claim of poor performance.
Respondent’s immediate filing for illegal dismissal indicated that he had not abandoned his work.
It was determined that respondent’s dismissal was carried out without due process.

Petitioner appealed the decision to the CA, arguing that the voluntary arbitrator exceeded his jurisdiction by deciding on the issue of illegal dismissal and awarding backwages and attorney’s fees—matters not expressly included in the Submission Agreement.
The CA affirmed the decision of the voluntary arbitrator regarding the separation pay, finding that the core issue arose from the claim of illegal dismissal, but eliminated the award of attorney’s fees for lack of sufficient justification.
Petitioner's subsequent Motion for Partial Reconsideration was also denied.

Whether the voluntary arbitrator exceeded his jurisdiction by deciding on the issue of the legality of respondent’s dismissal, which was not explicitly included in the Submission Agreement.
Whether resolving the issue of illegal dismissal was necessary for determining respondent’s entitlement to separation pay and backwages.

Whether the claim for separation pay inherently includes the issue of illegal dismissal, thereby implicitly granting the arbitrator the authority to decide on the legality of the termination.
Whether petitioner’s limitation of the dispute to merely separation pay and sales commission is legally tenable given the underlying circumstances of the dismissal.

Whether Article 217, which grants exclusive jurisdiction over termination disputes to the labor arbiter of the NLRC, precludes the voluntary arbitrator from deciding on illegal dismissal issues.
The role of Article 262 as an exception allowing voluntary arbitrators to adjudicate related labor disputes by agreement of the parties.