SC says ‘no-spouse employment’ unlawful

The Supreme Court (SC) has declared as “unlawful” employers’ “no-spouse employment policy” as it contravenes the 1987 Constitution that “guarantees the right of all workers to security of tenure.”

“An employer’s blanket policy of no-spouse employment is discriminatory. To justify its enforcement, the employer must clearly establish a reasonable business necessity,” the SC ruled, in a decision penned by Associate Justice Marvic Leonen.

With the ruling, the SC ordered the reinstatement of Catherine Dela Cruz-Cagampan as accounting specialist of One Network Bank, Inc. (ONBI).

The SC ordered ONBI to pay Dela Cruz her back wages, proportionate 13th month pay for 2010, allowances, and other benefits of their monetary equivalent from the time she was illegally dismissed on Feb. 17, 2010.

Dela Cruz is also entitled to 10 percent of the total monetary award as attorney’s fees and legal interest of six percent annually from the finality of the decision until fully paid.

The SC reversed the 2014 ruling of the Court of Appeals (CA) which overturned that issued by the National Labor Relations Commission (NLRC) which found Dela Cruz illegally dismissed.

Court records showed that Dela Cruz married on Oct. 31, 2009, her co-worker Audie Angelo who was a loan specialist at ONBI. At the time of marriage, Dela Cruz has been working with ONBI for the past five years.

After marriage, the couple requested ONBI’s permission to continue working with the bank, similar to the privilege given to other couples in the office.

They even suggested that Augie Angelo be transferred to another ONBI branch. Their pleas were denied by the bank. Her employment was terminated.

Dela Cruz sought reconsideration and pointed out that the “no-spouse policy” cannot be applied to her case because she has been employed with the bank prior to the adoption and enforcement of the policy.

She argued that the ONBI’s policy violates Article 134 of the Labor Code which bans practices that discriminate against marriage.

When her plea for reconsideration was denied, she filed a case for illegal dismissal before the NLRC. The arbiter ruled in her favor. The arbiter’s ruling was affirmed by the NLRC which found Dela Cruz illegal dismissed and ordered her reinstatement.

This prompted her employer to bring the case before the appellate court where it reversed the NLRC, ruling that ONBI’s policy was a valid exercise of management prerogative.

The CA pointed out that the policy is necessary for ONBI to protect the confidential information of its clients and minimize risks from married co-employees whose communication is privileged.

Aggrieved, Catherine elevated the case to the SC which ruled:

“This Court grants the Petition and reverses the assailed Court of Appeals judgment. Petitioner Catherine Dela Cruz-Cagampan was illegally dismissed and must be reinstated,” the SC said.

“The Constitution mandates the State to ‘afford full protection to labor and promote full employment and equality of employment opportunities for all. It guarantees the right of all workers to security of tenure,” it added.

It also cited the Magna Carta of Women, which provides that “the State commits to eliminate discrimination against women and ensures their right to freely choose a spouse. Particularly, Article 134 [136] of the Labor Code prohibits employers from discriminating women employees.”

“Apart from the couple’s supposed transgression when they married, respondents (ONBI) did not state any other reason why they dismissed petitioner (Catherine). Further, respondents (ONBI) consistently argued that the couple willingly violated the company policy despite their knowledge of it,” the high court ruled.

“While respondents maintain that petitioner and her husband both knowingly transgressed the rule, nothing in the records show why respondents dismissed petitioner in particular. To stress, they opted to terminate petitioner’s employment sans any reason why she must leave, in lieu of her husband. An employer’s dismissal of a female employee solely because of her marriage is precisely the discrimination that the Labor Code expressly prohibits. This Court cannot countenance respondents’ unlawful act,” it said.

“Indeed, employers may freely conduct their affairs and employ discretion and judgment in managing all aspects of employment. However, their exercise of this right to management prerogative must be in accord with justice and fair play,” it further said.

In ruling against the employer, the SC “weighed against the constitutionally mandated full protection to labor and the various statutory protections accorded to the sector, this Court finds that respondents failed to demonstrate the reasonable business necessity for its no-spouse employment policy.”

The high court also found that the CA erred in heavily relying on the higher standards of diligence required of banks to allow their immediate resort to an employee’s dismissal in case of marriage to a co-worker.

As petitioner pointed out, respondents may transfer either of them to a different branch, or reassign them in a different role, among others, to minimize the alleged risk that a married loan specialist and account specialist expose them to, the SC said.

Respondents may likewise implement stronger confidentiality measures that do not impinge on employees’ right to security of tenure, the tribunal added.

“There is no factual basis to conclude that all of their employees who marry each other would be unable to perform their duties, entailing one’s dismissal. The policy was couched in a general manner, that whenever any two of their employees marry, one must terminate employment immediately after marriage,” it noted.

Contrary to the Court of Appeals’ decision, the SC found that respondents’ no-spouse employment policy cannot justify petitioner’s dismissal.

“The National Labor Relations Commission did not gravely abuse its discretion, as nothing was whimsical, capricious, or arbitrary in finding that petitioner was illegally dismissed. A reasonable business necessity must be clearly shown to excuse a discriminatory exercise of management prerogative,” it said.

“Friends, lovers, and couples share secrets. Any bank employee may potentially craft elaborate schemes to embezzle the bank’s funds. While a bank must observe high standards of diligence, enforcing an arbitrary no- spouse employment rule that directs the immediate dismissal of an employee who marries a co-worker cannot be justified. That is illegal dismissal,” the SC pointed out.

“Respondent One Network Bank, Inc. is ordered to reinstate petitioner Catherine Dela Cruz-Cagampan to her former position, and to pay her backwages, including P1,501.13, her proportionate 13th month pay for 2010, allowances, and other benefits or their monetary equivalent from the time she was illegally dismissed on February 17, 2010, up to her actual reinstatement. She is also entitled to attorney’s fees of 10% of the total monetary award, subject to legal interest at the rate of 6% per annum from finality of this Decision until full payment. So ordered,” the SC held.