30 Manila Pavillion v. Delada

[MANAGEMENT PREROGATIVES] condition for his transfer.
Furthermore, the panel ruled that his transfer did not

MANILA PAVILION HOTEL V. DELADA prejudice or inconvenience him. Neither did it result in diminution of salaries or
JANUARY 25, 2012 | SERENO, J. demotion in rank. The PVA thus pronounced that Delada had no valid and
justifiable reason to refuse or even to delay compliance with the
Petitioner/s: MANILA PAVILION HOTEL, owned and operated by ACESITE (PHILS.) management’s directive.
Hotel Corporation  However, the PVA also ruled that there was no legal and factual basis to
Respondents: HENRY DELADA support petitioner’s imposition of preventive suspension on Delada.
According to the panel, the mere assertion of MPH that "it is not far-fetched for
Doctrine: The refusal to obey a valid transfer order constitutes willful disobedience of Henry Delada to sabotage the food " was more imagined than real. It also found
a lawful order of an employer. Employees may object to, negotiate and seek redress that MPH went beyond the 30-day period of preventive suspension prescribed
against employers for rules or orders that they regard as unjust or illegal. However, by the Implementing Rules of the Labor Code when petitioner proceeded to
until and unless these rules or orders are declared illegal or improper by competent impose a separate penalty of 90-day suspension on him. Furthermore, the PVA
authority, the employees ignore or disobey them at their peril. ruled that MPH lost its authority to continue with the administrative
proceedings. According to the panel, it acquired exclusive jurisdiction over the
Facts: issue when the parties submitted the aforementioned issues before it. The panel
 Respondent Henry Delada was the Union President of the Manila Pavilion reasoned that the joint submission to it of the issue on the validity of the transfer
Supervisors Association at petitioner Manila Pavilion Hotel. He was order encompassed, by necessary implication, the issue of respondent’s
originally assigned as Head Waiter of Rotisserie, a fine-dining restaurant insubordination and willful disobedience of the transfer order. Thus, MPH
operated by petitioner. Pursuant to a supervisory personnel reorganization effectively relinquished its power to impose disciplinary action.
program, MPH reassigned him as Head Waiter of Seasons Coffee Shop, another  As to the other issues, the panel found that there was no valid justification to
restaurant operated by petitioner at the same hotel. Respondent declined the conduct any strike or concerted action as a result of Delada’s preventive
inter-outlet transfer and instead asked for a grievance meeting on the matter, suspension and that MPH was liable to pay back wages and other benefits.
pursuant to their CBA. He also requested his retention as Head Waiter of  The CA affirmed the decision of the PVA and denied petitioner’s MR.
Rotisserie while the grievance procedure was ongoing. Consequently, MPH filed the instant Petition.
 MPH replied and told respondent to report to his new assignment for the time
being but he adamantly refused. Thus, MPH sent him several memoranda Issues/Ruling:
requiring him to explain why he should not be penalized for the following W/N MPH retained the authority to continue with the administrative case
offenses: serious misconduct; willful disobedience of the lawful orders of the against Delada for insubordination and willful disobedience of the transfer
employer; gross insubordination; gross and habitual neglect of duties; and willful order. – YES.
breach of trust.  According to MPH, the specific issue of whether respondent could be held liable
 Despite the notices from MPH, Delada persistently rebuffed orders for him to for his refusal to assume the new assignment was not raised before the PVA,
report to his new assignment. According to him, since the grievance machinery and that the panel’s ruling was limited to the validity of the transfer order.
under their CBA had already been initiated, his transfer must be held in  Pursuant to the doctrines in Sime Darby Pilipinas, where the Court ruled that the
abeyance. Thus, MPH initiated administrative proceedings against him. He voluntary arbitrator had plenary jurisdiction and authority to interpret the
attended the hearings together with union representatives. The parties failed to agreement to arbitrate and to determine the scope of his own authority – subject
reach a settlement. He then lodged a complaint before the National Conciliation only, in a proper case, to the certiorari jurisdiction of the Court, and Ludo & Luym
and Mediation Board. Corporation, where the Court recognized that voluntary arbitrators can assume
 While respondent’s complaint was pending before the Panel of Voluntary that they have the necessary power to make a final settlement on the related
Arbitrators (PVA), MPH continued with the disciplinary action against him and issues, the PVA was authorized to assume jurisdiction over the related issue of
was also placed on a 30-day preventive suspension. On 8 June 2007, MPH insubordination and willful disobedience of the transfer order. Nevertheless, the
issued a Decision, which found him guilty of insubordination and this doctrine in the aforementioned cases is inapplicable to the present petition.
imposed the penalty of 90-day suspension. He opposed the Decision, arguing In those cases, the voluntary arbitrators did in fact assume jurisdiction over the
that MPH had lost its authority to proceed with the disciplinary action against him, related issues and made rulings on the matter. In the present case, however,
since the matter had already been included in the voluntary arbitration. the PVA did not make a ruling on the specific issue of insubordination and
 The PVA ruled that the transfer of Delada was a valid exercise of willful disobedience of the transfer order. The PVA merely said that its
management prerogative. The transfer order was done in the interest of the disagreement with the 90-day penalty of suspension stemmed from the fact that
efficient and economic operations of MPH, and that there was no malice, bad the penalty went beyond the 30-day limit for preventive suspension.
faith, or improper motive attendant upon the transfer of Delada. The mere fact  First, it must be pointed out that the basis of the 30-day preventive
that he was the Union President did not "put color or ill motive and purpose" to suspension was different from that of the 90-day penalty of suspension.
his transfer. On the contrary, the PVA found that the real reason why he refused The 30-day preventive suspension was imposed on the assertion that Delada
to obey the transfer order was that he asked for additional monetary benefits as a might sabotage hotel operations. On the other hand, the 90-day suspension was
imposed as a form of disciplinary action and was the outcome of the
administrative proceedings conducted against him. Preventive suspension is a
disciplinary measure resorted to by the employer pending investigation of an
alleged malfeasance or misfeasance. On the other hand, the penalty of
suspension refers to the disciplinary action imposed on the employee after an
official investigation or administrative hearing is conducted. Thus, a finding of
validity of the penalty of 90-day suspension will not embrace the issue of
the validity of the 30-day preventive suspension.
 It can be seen that, unlike in Sime Darby Pilipinas and Ludo & Luym Corporation,
the PVA herein did not make a definitive ruling on the merits of the validity of the
90-day suspension. The panel only held that MPH lost its jurisdiction to impose
disciplinary action on respondent. Accordingly, the Court rules in this case
that MPH did not lose its authority to discipline respondent for his
continued refusal to report to his new assignment.
 In Allied Banking Corporation, the Court ruled that “the refusal to obey a valid
transfer order constitutes willful disobedience of a lawful order of an
employer. Employees may object to, negotiate and seek redress against
employers for rules or orders that they regard as unjust or illegal. However,
until and unless these rules or orders are declared illegal or improper by
competent authority, the employees ignore or disobey them at their peril.”
 Pursuant to Allied Banking, unless the order of MPH is rendered invalid, there is
a presumption of the validity of that order. Since the PVA eventually ruled that the
transfer order was a valid exercise of management prerogative, the Court hereby
reverses the CA.
W/N MPH is liable to pay back wages. – NO. MPH had the authority to continue
with the administrative proceedings for insubordination and willful
disobedience against Delada and to impose on him the penalty of suspension.
Dispositive
WHEREFORE, the Petition is GRANTED. The Decision and the Resolution of the
Court of Appeals are hereby MODIFIED. We rule that petitioner Manila Pavilion Hotel
had the authority to continue with the administrative proceedings for insubordination
and willful disobedience against Delada and to impose on him the penalty of
suspension. Consequently, petitioner is not liable to pay back wages and other
benefits for the period corresponding to the penalty of 90-day suspension.

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[MANAGEMENT PREROGATIVES] condition for his transfer.

Furthermore, the panel ruled that his transfer did not

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