Facts:

The case involves petitioners Herminigildo Inguillo and Zenaida Bergante against respondents First Philippine Scales, Inc. (FPSI) and its manager Amparo Policarpio. The events leading to the case began when FPSI, a corporation engaged in manufacturing weighing scales, employed Bergante and Inguillo on August 15, 1977, and September 10, 1986, respectively. In 1991, FPSI entered into a Collective Bargaining Agreement (CBA) with the First Philippine Scales Industries Labor Union (FPSILU), which was ratified by the union members, including the petitioners. The CBA included a Union Security Clause requiring members to maintain their membership in good standing with FPSILU.

During the CBA's duration, both petitioners joined a rival union, the Nagkakaisang Lakas ng Manggagawa (NLM), which led to an intra-union dispute. The Med-Arbiter ruled in favor of FPSILU, ordering NLM to return union dues collected from employees. Subsequently, FPSILU's executive board petitioned FPSI...

Facts:

Employment and CBA Ratification

Petitioners Herminigildo Inguillo and Zenaida Bergante were employed by First Philippine Scales, Inc. (FPSI) as assemblers in 1977 and 1986, respectively. In 1991, FPSI entered into a Collective Bargaining Agreement (CBA) with the First Philippine Scales Industries Labor Union (FPSILU), which included a "Union Security Clause." Both petitioners signed the document ratifying the CBA.

Affiliation with Rival Union

During the CBA's lifetime, petitioners and other employees joined the Nagkakaisang Lakas ng Manggagawa (NLM), a rival union, leading to an intra-union dispute. The Med-Arbiter ruled in favor of FPSILU, ordering NLM to return erroneously collected union dues.

Petition for Termination

On March 18, 1996, FPSILU submitted a "Petisyon" to FPSI’s General Manager, Amparo Policarpio, seeking the termination of petitioners and others for disloyalty, dereliction of duty, and other acts detrimental to the union and company.

Termination and Legal Proceedings

On May 16, 1996, FPSI terminated the petitioners. Inguillo and Bergante filed complaints for illegal dismissal. The Labor Arbiter dismissed their claims, but the National Labor Relations Commission (NLRC) reversed the decision, ordering reinstatement and payment of backwages. On appeal, the NLRC reinstated the Labor Arbiter’s decision, holding the dismissal valid under the Union Security Clause.

Court of Appeals Ruling

The Court of Appeals upheld the NLRC’s decision, affirming the validity of the dismissal under the Union Security Clause but noting procedural deficiencies in the termination process.

Issue:

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Ruling:

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Ratio:

1. Validity of Dismissal Under Union Security Clause
   The Union Security Clause in the CBA required employees to maintain membership in FPSILU during the CBA’s term. Petitioners’ disaffiliation and affiliation with a rival union violated this clause, justifying their dismissal. The Court upheld the enforceability of union security clauses as a means to strengthen union solidarity and collective bargaining.

2. Procedural Due Process
   The Court emphasized the importance of procedural due process in termination cases. FPSI failed to provide petitioners with the required two written notices (detailing the grounds for dismissal and the decision to terminate) and a hearing. The "Petisyon" submitted by FPSILU did not suffice as proper notice.

3. Nominal Damages for Procedural Violations
   While the dismissal was substantively valid, FPSI’s failure to observe procedural due process warranted nominal damages of P30,000.00 each for petitioners.