Case # 1: owned and operated by ACESITE MANILA PAVILION HOTEL, owned and operated by ACESITE

(PHILS.) HOTEL CORPORATION (PHILS.) vs Henry Delada

Facts:
The present Petition stems from a grievance filed by respondent Henry Delada against petitioner Manila
Pavilion Hotel (MPH).

Delada was the Union President of the Manila Pavilion Supervisors Association at MPH originally
assigned as Head Waiter of Rotisserie, a fine-dining restaurant then, reassigned as Head Waiter of
Seasons Coffee Shop.

Delada declined the inter-outlet transfer and instead asked for a grievance meeting on the matter,
pursuant to their Collective Bargaining Agreement (CBA). He also requested his retention as Head
Waiter of Rotisserie while the grievance procedure was ongoing. The Mgt. denied the request and he
kept on reporting to Rotisserie.

Delada refused to assume his new post at the Seasons Coffee Shop and instead continued to report to
his previous assignment at Rotisserie.

MPH sent him several memoranda requiring him to explain in writing why he should not be penalized
for the following offenses: serious misconduct; willful disobedience of the lawful orders of the
employer; gross insubordination; gross and habitual neglect of duties; and willful breach of trust.

Delada persistently rebuffed orders for him to report to his new assignment. Thus, MPH initiated
administrative proceedings against him.

No settlement between the parties was reached during the grievance meeting concerning the validity of
MPH's transfer order.

While respondent’s Complaint concerning the validity of his transfer is pending before the Panel of
Voluntary Arbitrators (PVA), MPH continued with the disciplinary action against him for his refusal to
report to his new post. Citing security and safety reasons, Delada was placed respondent on a 30-day
preventive suspension. Thereafter found Delada guilty of insubordination based on his repeated and
willful disobedience of the transfer order imposing the penalty of 90-day suspension.

Delada opposed the Decision, arguing that MPH had lost its authority to proceed with the disciplinary
action against him, since the matter had already been included in the voluntary arbitration

PVA issued a Decision and ruled that the transfer of Delada was a valid exercise of management
prerogative. According to the panel, the transfer order was done in the interest of the efficient and
economic operations of MPH, and that there was no malice, bad faith, or improper motive attendant
upon the transfer of Delada.

The PVA also ruled that there was no legal and factual basis to support petitioner's imposition of
preventive suspension on Delada. It also found that MPH went beyond the 30-day period of preventive
suspension prescribed by the Implementing Rules of the Labor Code when petitioner proceeded to
impose a separate penalty of 90-day suspension on him
Furthermore, the PVA ruled that MPH lost its authority to continue with the administrative proceedings
for insubordination and willful disobedience of the transfer order and to impose the penalty of 90-day
suspension on respondent. According to the panel, it acquired exclusive jurisdiction over the issue when
the parties submitted the aforementioned issues before it. Thus, MPH effectively relinquished its power
to impose disciplinary action on Delada.

Panel also ruled that since the 30-day preventive suspension and the penalty of 90-day suspension was
invalid, then MPH was liable to pay back wages and other benefits.

MPH argues that it did not lose its authority to discipline Delada notwithstanding the joint submission to
the PVA of the issue of the validity of the transfer order. According to MPH, the specific issue of whether
respondent could be held liable for his refusal to assume the new assignment was not raised before the
PVA, and that the panel's ruling was limited to the validity of the transfer order. Thus, petitioner
maintains that it cannot be deemed to have surrendered its authority to impose the penalty of
suspension.

The CA affirmed the Decision of the PVA and denied petitioner's Motion for Reconsideration.
Consequently, MPH filed the instant Petition.

Issues:
1. Whether MPH retained the authority to continue with the administrative case against Delada
for insubordination and willful disobedience of the transfer order. YES
2. Whether MPH is liable to pay back wages.NO

Held:
1. Yes.
We rule that petitioner 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. Consequently, petitioner is not liable to pay back wages and other benefits for the period
corresponding to the penalty of 90-day suspension.

First, it must be pointed out that the basis of the 30-day preventive suspension imposed on Delada was
different from that of the 90-day penalty of suspension. The 30-day preventive suspension was imposed
by MPH on the assertion that Delada might sabotage hotel operations if preventive suspension would
not be imposed on him. On the other hand, the penalty of 90-day suspension was imposed on
respondent as a form of disciplinary action. It was the outcome of the administrative proceedings
conducted against him.

Preventive suspension is a disciplinary measure resorted to by the employer pending investigation of

The penalty of suspension refers to the disciplinary action imposed on the employee after an official
investigation or administrative hearing is conducted. The employer exercises its right to discipline
erring employees pursuant to company rules and regulations. 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. In any
event, petitioner no longer assails the ruling of the CA on the illegality of the 30-day preventive
suspension.

2. No.
Petitioner is not liable to pay back wages and other benefits for the period corresponding to the penalty
of 90-day suspension.

In the case of Allied Banking Corporation vs. Court of Appeals, the court ruled that:
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, we hereby reverse the Decision and the Resolution of the CA affirming the
Decision of the PVA in this respect. 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. As a consequence, petitioner is not liable to pay back wages and other benefits
for the period corresponding to the penalty of 90-day suspension.

In fact, Delada cannot hide under the legal cloak of the grievance machinery of the CBA or the voluntary
arbitration proceedings to disobey a valid order of transfer from the management of the hotel. While it
is true that Delada's transfer to Seasons is the subject of the grievance machinery in accordance with the
provisions of their CBA, Delada is expected to comply first with the said lawful directive while awaiting
the results of the decision in the grievance proceedings.