MEMORANDUM

TO : ALL REGIONAL BRANCHES

This Board

RE : ADVISORY ON THE HANDLING OF NOTICE TO ARBITRATE

DATE : 28 August 2020

In the interest of the service and pursuant to Section 3, Rule XIX, Department Order
No. 40-03 and Section 6, Rule IV on the Revised Procedural Guidelines in the Conduct
of Voluntary Arbitration Proceedings and Section 29 of the Amended Standard Terms
and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board
Ocean-Going Ships, the following procedure in the handling of Notice to Arbitrate
(NTA) shall be observed by the Regional Branches.

1. The process operates under the assumption that the issues involved in the dispute
are grievable and that an agreement to arbitrate is contained in the collective
bargaining agreement (CBA) and despite the existence of the Arbitration Clause,
parties failed to faithfully comply with it.

a. For local collective bargaining agreements, Section 3, Rule XIX, Department

Order No. 40-03 provides:

Section 3. Submission to voluntary arbitration. – Where grievance

remains unresolved, either party may serve notice upon the other of its
decision to submit the issue to voluntary arbitration. The notice shall state the
issue or issues to be arbitrated, copy thereof furnished the board or the
voluntary arbitrator or panel of voluntary arbitrators named or designated in
the collective bargaining agreement.

If the party upon whom the notice is served fails or refuses to respond
favorably within seven (7) days from receipt thereof, the voluntary arbitrator
or panel of voluntary arbitrators designated in the collective bargaining
agreement shall commence voluntary arbitration proceedings. Where the
collective bargaining agreement does not so designate, the board shall call
the parties and appoint a voluntary arbitrator or panel of voluntary arbitrators,
who shall thereafter commence arbitration proceedings in accordance with
the preceding paragraph.

In instances where parties fail to select a voluntary arbitrator or panel of

voluntary arbitrators, the regional branch of the Board shall designate the
voluntary arbitrator or panel of voluntary arbitrators, as may be necessary,
which shall have the same force and effect as if the parties have selected the
arbitrator.

b. For seafarers covered by CBAs and the Amended POEA Standard

Employment Contracts, Sec. 29 - Dispute Settlement Procedures provides
that:

In cases of claims and disputes arising from this employment, the parties
covered by a collective bargaining agreement shall submit the claim or
dispute to the original and exclusive jurisdiction of the voluntary arbitrator or

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 panel of voluntary arbitrators. If the parties are not covered by a collective
bargaining agreement, the parties may at their option submit the claim or
dispute to either the original and exclusive jurisdiction of the National Labor
Relations Commission (NLRC), pursuant to Republic Act (RA) 8042
otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995,
as amended, or to the original and exclusive jurisdiction of the Voluntary
arbitrator or panel of arbitrators. If there is no provision as to the voluntary
arbitrators to be appointed by the parties, the same shall be appointed from
the accredited voluntary arbitrators of the National Conciliation and Mediation
Board of the Department of Labor and Employment.

2. The following documents shall be presented before the Notice to Arbitrate (NTA)
may be entertained at any Regional Conciliation and Mediation Branch (RCMB):

a. Copy of the NTA Form or letter duly received by the Responding Party;
b. For land-based companies, authenticated copy of a valid CBA provision on
voluntary arbitration
c. For seafarers, copy of the POEA Standard Employment Contract showing
CBA coverage of the seafarer or any equivalent document showing CBA
coverage duly certified by authorized officers and authenticated copy of the
dispute resolution procedure in the CBA;
d. Copy of the minutes of the last grievance meeting showing failure to resolve
the issue/s or proof of efforts to process the grievance/issues at the grievance
machinery or proof of service of letters and documents initiating the grievance
process but left unanswered or ignored.

NTA with incomplete requirements shall not be accepted and the Requesting Party
shall be advised accordingly.

3. The RCMB concerned shall monitor the status of the NTA served to the
Responding Party by the Requesting Party. After the lapse of seven (7) days from
the receipt by the Responding Party and no action has been made at the plant-
level, the RCMB shall schedule the initial conference, notifying the Requesting
Party and the Responding Party.

4. During the initial conference, the Conciliator-Mediator or case handling officer shall
validate and ensure that the following information are satisfied:

a. The issue/s involved grievance/s as per CBA or company personnel policies

or per existing rules and regulations;
b. The grievance remains unresolved after exhaustion of the grievance
machinery or the Responding Party failed to address the grievance through
the grievance machinery despite request/s for a grievance meeting by the
Requesting Party;
c. The Requesting Party has served an NTA to the other party; and
d. The Responding Party has failed to respond favorably within 7 days from
receipt of the NTA.

Once the foregoing has been satisfied, the Conciliator-Mediator or case handling
officer shall proceed with the conduct of mandatory conciliation-mediation
proceedings to explore the possibility of settlement.

If unsatisfied, the proceedings shall be terminated and the issues shall be reverted
to the plant-level through the Grievance Machinery if there has been no exhaustion
of its procedures. If the issue/s is/are not proper subject of Voluntary Arbitration
the same shall be referred to the National Labor Relations Commission (NLRC)
for further proceedings.

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 Any Motion to Dismiss filed by any party shall be addressed/discussed during the
initial conference and accordingly included in the Minutes of proceedings.

5. The Conciliator-Mediator or case handling officer shall exert best efforts to settle
the issues within the mandatory period:

a. 30 working days for land-based cases; and

b. 60 working days for seafarers, referencing from the conference after the initial
one.

After due assessment and the Conciliator-Mediator or case handling officer is

convinced that the possibility of any compromise is remote, he or she shall
recommend the termination of the conciliation-mediation proceedings and proceed
with the selection of the Sole Arbitrator or Panel of Voluntary Arbitrators even
before the lapse of the mandatory period, subject to concurrence of the parties.

Should the issue/s or grievance/s remain unresolved after the 30- or 60-day
mandatory period, the Conciliator-Mediator or case handling officer shall proceed
and start the selection process for the Sole Arbitrator or Panel of Voluntary
Arbitrators.

The mandatory period may, however, be extended upon agreement of the parties.
In no case shall it go beyond a total of 45 working days for land-based and 90
working days for seafarers.

6. When the issue/s subject of the Notice to Arbitrate has/have undergone

conciliation-mediation proceedings under the Preventive Mediation or Notice of
Strike framework, the Conciliator-Mediator or case handling officer shall
immediately proceed with the selection of Sole Arbitrator or Panel of Voluntary
Arbitrator, considering that conciliation-mediation efforts have been already
exhausted.

7. The Sole Arbitrator or Panel of Voluntary Arbitrators shall be selected according to

the parties' CBA. In the absence of such agreement, the following shall be
observed:

a. Sole Arbitrator

Each party shall nominate not more than five (5) names from the list of active
Accredited Voluntary Arbitrators from which the Sole Arbitrator shall be
selected through raffle;

b. Panel of Voluntary Arbitrators

The parties shall name their respective nominees to the Panel, and the
Chairman shall be raffled from the list of active Accredited Voluntary Arbitrators;

When the parties cannot agree on the above specified manner, in the selection
of the Chairman of the Panel of Voluntary Arbitrators, the same shall be done
through raffle from the list of five (5) nominees submitted by each of the parties.

Except for justifiable reasons or conflict of interest, as provided under the rules
on inhibition, the parties are entitled to submit their nominees to the Panel free
from interference from the other party.

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 However, no Voluntary Arbitrator shall be eligible to be included in the raffle if s/he
has five (5) pending cases.

If the CBA does not specify the number of arbitrators, the case shall be heard and
resolved by a Sole Arbitrator, unless the parties agree otherwise.

8. In case one party refuses to submit to Voluntary Arbitration or refuses to submit

names for inclusion in the raffle for Sole Arbitrator or nominees to the Panel of
Voluntary Arbitrators and/or Chairman of the Panel of Voluntary Arbitrators, the
Regional Branch Director shall facilitate the selection of the Sole Arbitrator or
Panel of Voluntary Arbitrators/Chairman of the Panel of Voluntary Arbitrators,
through raffle from the active list of Accredited Voluntary Arbitrators. Both parties
shall be notified of the date and time of selection by raffle. It shall proceed with or
without their presence on the date and time as scheduled. The Sole Arbitrator or
Panel of Voluntary Arbitrators/Chairman of the Panel of Voluntary Arbitrators
whose names were drawn shall be notified through a Notice of Selection, copy
furnished both parties.

For your guidance.

MARIA TERESITA D. LACSAMANA-CANCIO

Executive Director IV

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