A professor was suspended by a Davao school, and she filed a case for constructive dismissal before the Labor Arbiter. The school pointed out that she agreed to have the case resolved by a voluntary arbitrator, hence the Labor Arbiter had no jurisdiction to hear the case. Both the National Labor Relations Commission and the Court of Appeals upheld the jurisdiction of the Labor Arbiter.

The Supreme Court said no. When the parties agree to voluntary arbitration, the Labor Arbiter loses jurisdiction over the case. This is the exception stated in Art. 262 to the original and exclusive jurisdiction of the Labor Arbiter stated in Art. 217 of the Labor Code. This exception which was applied in the case of San Miguel Corp. v. NLRC, 325 Phil. 401 (1996), is founded upon the Constitutional principle in Sec. 3, Art. XIII, favoring the preferential use of voluntary modes in settling disputes to promote industrial peace. (UIC v. NLRC, G.R. No. 181146, January 26, 2011)