G.R. No. 232687 - Slord Development Corp. vs. Noya

Respondent was employed as a welder by petitioner on September 9, 2008 in a domestic corporation engaged in manufacturing and processing canned goods.
His employment was covered by a Collective Bargaining Agreement (CBA) effective from April 14, 2009 to April 15, 2014, between petitioner and Nagkakaisang Lakas ng Manggagawa-Katipunan (NLM-Katipunan), the sole and exclusive bargaining agent.
The CBA contained a union security clause that mandated membership in the union. Under this clause, failure to join or continued membership underscored grounds for dismissal upon written demand by the union.

In December 2013, respondent allegedly solicited several employees to sign a blank document (yellow paper) for organizing a new union.
Subsequently, on February 9, 2014, respondent organized a rival union named Bantay Manggagawa sa SLORD Development Corporation (BMSDC), which was later registered with the Department of Labor and Employment (DOLE) on February 20, 2014.
During internal investigations by NLM-Katipunan, respondent failed to participate in scheduled hearings regarding the complaint against him.

Based on the alleged act of disloyalty, NLM-Katipunan initiated expulsion proceedings against respondent.
A notice of expulsion was issued by the union on February 27, 2014.
On March 16, 2014, NLM-Katipunan sent a letter to petitioner, demanding respondent’s termination pursuant to the union security clause.
After being informed and shown the documents concerning his expulsion, respondent’s employment was terminated on March 19, 2014.

Respondent filed a complaint before the National Labor Relations Commission (NLRC) for illegal dismissal, unfair labor practice, and illegal deductions, asserting that his organizing of BMSDC occurred within the freedom period, which should have permitted his activities.
The Labor Arbiter ruled on August 27, 2014 that respondent’s dismissal was neither illegal nor an unfair labor practice, noting the obligation of petitioner to terminate him given the union’s expulsion order.
On September 30, 2014, the NLRC affirmed the Labor Arbiter’s decision with modifications, awarding respondent nominal damages of P10,000.00 on the ground that petitioner failed to afford him adequate opportunity to defend his case through proper written notices and hearings.
A motion for reconsideration was filed by respondent but was denied by the NLRC on November 14, 2014.
Dissatisfied with the NLRC ruling, respondent elevated the matter to the Court of Appeals (CA) via a petition for certiorari, which resulted in a decision on January 25, 2017, ordering petitioner to reinstate respondent, pay full backwages and other allowances, along with attorney’s fees.
Petitioner’s subsequent motion for reconsideration before the CA was denied on July 7, 2017, prompting the present petition for review.

Whether the Court of Appeals erred in ruling that respondent was illegally dismissed despite the existence of a valid union security clause within the CBA.

Is the dismissal substantively justified on the ground of disloyalty for organizing a rival union outside the freedom period?
Did petitioner violate the requirements of procedural due process by failing to provide adequate notice and conduct a hearing prior to the dismissal, thereby warranting nominal damages?