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Manila Pavillion Hotel v. Henry Delada G.R. No. 189947 January 25, 2012 Sereno, J.

Facts: Respondent Henry Delada (Delada) was an employee of petitioner Manila Pavillion Hotel (Hotel). He was originally assigned as Head Waiter of Rotisserie, a fine-dining restaurant operated by the Hotel. Pursuant to a supervisory personnel reorganization program, Delada was reassigned as Head Waiter of Seasons Coffee Shop, another restaurant operated by the Hotel in the same establishment. Delada declined the 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 Hotel ordered Delada to report to his new assignment for the time being, without prejudice to the resolution of the grievance involving the transfer. However, Delada adamantly refused despite a number of notices from the hotel requiring him to explain in writing why he should not be penalized for serious misconduct, wilful disobedience of the lawful orders of the employer, gross insubordination; gross and habitual neglect of duties, and wilful breach of trust. According to Delada, since the grievance machinery under their CBA had already been initiated, his transfer must be held in abeyance. After several failed attempts to reach a settlement, Delada lodged a complaint before the National Conciliation and Mediation Board. The parties then agreed to submit to voluntary arbitration. While the arbitration case was pending before the Panel of Voluntary Arbitrators (Panel), the Hotel continued with the disciplinary action against Delada for the latters refusal to obey the transfer order, in accordance with its own company policies. The Hotel also placed Delada on a 30-day preventive suspension, for security and safety reasons; to prevent the possibility of Delada sabotaging the food to be prepared and served to the Hotels dining guest and employees because of the hostile relationship then existing between them. The Hotel found Delada guilty of insubordination based on his repeated and wilful disobedience of the transfer order, and imposed the penalty of 90-days suspension. Delada opposed the Decision, arguing that the Hotel lost its authority to proceed with the disciplinary action against him, since the matter had already been included in the voluntary arbitration. Thereafter, the Panel then issued a decision. It ruled that the transfer order to Delada was a valid exercise of the Hotels management prerogative; that the transfer order was done without malice or bad faith in the interest of the efficient and economic operations of the Hotel. The Panel also ruled that there was no legal and factual basis to support the Hotels imposition of the 30-day preventive suspension on Delada. It also found that the Hotel went beyond the 30-day limit on preventive suspension prescribed by the Implementing Rules of the Labor Code when the Hotel proceeded to impose a separate penalty of 90-day suspension on Delada. Furthermore, the Panel ruled that the Hotel relinquished its authority to continue with the administrative proceedings for insubordination and wilful disobedience of the transfer order and to impose the penalty of 90-day suspension, since the Panel

acquired exclusive jurisdiction over the issue when the parties submitted the aforementioned issues before it. The Panel reasoned that the joint submission to it of the issue on the validity of the transfer order encompassed, by necessary implication, the issue of respondents insubordination and wilful disobedience of the transfer order. Issue # 1: Whether or not the Voluntary Arbitrators ruling is limited to the specific issues brought before it and cannot assume jurisdiction over related issues not raised in the arbitration. Held: NO. Voluntary Arbitrators has plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine the scope of his own authority subject only, in a proper case, to the certiorari jurisdiction of the Supreme Court. Voluntary arbitrators are generally expected to decide only those questions expressly delineated by the submission agreement. Nevertheless, they can assume that they have the necessary power to make a final settlement on the related issues, since arbitration is the final resort for the adjudication of disputes. The failure of the parties to specifically limit the issues to that which was stated authorizes the arbitrator to assume jurisdiction over related issues. Therefore, the Panel of Voluntary Arbitrators is authorized to assume jurisdiction over the related issue of insubordination and wilful disobedience of the transfer order, even though the issue that was raised was the validity of the transfer order. Issue # 2: Whether or not the Hotel lost its authority to continue with the administrative proceedings for insubordination and wilful disobedience against Delada and to impose on him the penalty of suspension. Held: NO. The Panel of Voluntary Arbitrators did not make a definitive ruling on the merits of the validity of the 90-day suspension. It merely stated that its disagreement with the 90-day penalty of suspension stemmed from the fact that the penalty went beyond the 30-day limit for preventive suspension. In other words, the ruling of the Panel merely declared that it acquired jurisdiction not only over the issue submitted in the arbitration (validity of the transfer order) but also over the related issue of insubordination and wilful disobedience in non-compliance with the transfer order, without discussing the merits of such related issue. In order for the Voluntary Arbitrator to acquire jurisdiction over issues not submitted for arbitration but are related to those issues stated in the submission agreement, it should make a definitive ruling on the merits of such related issues. For the Voluntary Arbitrator to assume jurisdiction over the issue of insubordination and wilful disobedience, it must make a definitive ruling on that issue. Having failed to do so, it cannot be taken that the hotel relinquished its authority to impose disciplinary action to Delada, since the Voluntary Arbitrator did not acquire jurisdiction over the issue of insubordination and wilful disobedience. Issue # 3: WON the Hotel violated the 30-day period prescribed by the Implementing Rules of the Labor Code for preventive suspension by imposing the 90-day suspension penalty on Delada Held: NO. 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 Delada as a form of disciplinary action. Preventive suspension is a disciplinary measure resorted to by the employer pending

investigation of an alleged malfeasance or misfeasance committed by an employee. 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. Hence, 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.

Issue # 4: WON Delada is entitled to back wages and other benefits for the period corresponding to the penalty of 90-day suspension. Held: NO. 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. The transfer order issued by the Hotel was a valid exercise of its management prerogative. While it is true that Deladas transfer is the subject of the grievance machinery in accordance with the provisions of their CBA, he is expected to comply first with the said lawful directive while awaiting the results of the decision in the grievance proceedings. He 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.