Slord Development Corp.
vs Noya
G.R. No. 232687. February 4, 2019.
FACTS: Respondent was employed on September 9, 2008 as a welder by petitioner. Respondent’s
employment was covered by a CBA (effective until April 15, 2014) between petitioner and NLM-
Katipunan, the company’s sole and exclusive bargaining agent for all the regular rank-and-file employees.
In the union’s security clause, Art. II, Sec. 3 states that union members who is expelled from the union or
fails to maintain their membership in the union may be dismissed from employment.
Petitioner claimed that sometime in December 2013, respondent asked several employees to affix their
signatures on a blank sheet of yellow paper for the purpose of forming a new union; prompting the
president of NLM-Katipunan to file expulsion proceedings against him for disloyalty. Subsequently, on
February 2014, respondent organized a new union named BMSDC, which he registered with the DOLE
on February 2014.
In the ensuing investigation, respondent failed to appear and participate at the scheduled hearings before
the union. Upon a letter sent by NLM-Katipunan to petitioner, demanding the termination of Noya,
respondent’s employment was terminated on March 19, 2014. Consequently, respondent filed a
complaint for illegal dismissal, ULP among others, asserting that he did not violate any CBA provision
since he validly organized BSMDC during the freedom period.
The LA dismissed the case for lack of merit, ruling that the respondent’s dismissal was neither illegal nor
an unfair labor practice. That NLM-Katipunan has a valid closed shop agreement in the CBA that required
the members to remain with the union as a condition for continued employment. The NLRC affirmed LA
with modification, ordering petitioner to pay respondent P10,000.00 as nominal damages. The CA on the
other hand, granted respondent’s petition, finding his dismissal to be illegal therefore ordering the
reinstatement of respondent.
ISSUE: Whether the CA was correct in ruling that respondent was illegally dismissed.
RULING: The CA erred. Petition is meritorious.
Case law recognizes that dismissal from employment due to the enforcement of the union security clause
in the CBA is another just cause for termination of employment. Similar to the enumerated just causes in
the Labor Code, the violation of a union security clause amounts to a commission of a wrongful act or
omission out of one's own volition; hence, it can be said that the dismissal process was initiated not by
the employer but by the employee's indiscretion.
The stipulation in a CBA based on this provision of the Labor Code is commonly known as the "union
security clause." Union security is a generic term which is applied to and comprehends closed shop,
union shop, maintenance of membership, and other form of agreement which imposes upon employees
the obligation to acquire or retain union membership as a condition affecting employment.
There is union shop when all new regular employees are required to join a union within a certain period
for their continued employment. There is maintenance of membership shop when employees, who are
union members must maintain union membership as a condition for continued employment until they are
promoted or transferred out of the bargaining unit, or the agreement is terminated. A closed shop, on the
other hand, is an agreement between employer and his employees that no person may be employed in
any or certain agreed departments of the enterprise unless he or she is a member in good standing of a
union entirely compromised of or of which the employees in interest are a part. This is allowed as a
means of encouraging workers to join and support the union of their choice.
To validly terminate the employment of an employee through the enforcement of the union
security clause, the following requisites must concur: (1) the union security clause is applicable;
(2) the union is requesting for the enforcement of the union security provision in the CBA; and (3)
there is sufficient evidence to support the decision of the union to expel the employee from the
union. In this case, the Court finds confluence with the foregoing requisites, warranting the
termination respondent’s employment.
Notably, the Court has consistently upheld the validity of closed shop agreement as a form of union
security clause as in the case of BPI vs BPI Employees Union-Daveo Chapter. NLM-Katipunan explained
that respondent solicited support from employees and thereafter, formed and organized a new union
outside the freedom period, or from February 14, 2014 to April 14, 2014 (60 days).
As shown by the testimonies of different employees of petitioner, indeed, respondent did not only solicit
support in the formation of a new union but actually formed and organized a rival union outside the
freedom period. Organization by union members of a rival union outside the freedom period, without first
terminating their membership in the union and without the knowledge of the officers of the latter union, is
considered an act of disloyalty, for which the union members may be sanctioned.
Therefore, the dismissal is upheld. However, nominal damages of P30,000.00 is to be paid for violation of
the respondent’s right to procedural due process.
