Termination For Marrying a Co-Employee Declared Discriminatory by SC

The State’s duty to afford full protection to labor[1] is found in no less than the 1987 Constitution. Our fundamental law mandates the promotion of full employment and equal work opportunities regardless of sex, race, or creed.[2]

This essential mandate is reinforced by the non-discrimination clause in our Labor Code, with particular attention on discrimination against women and marriage. Article 136 of the Labor Code deems it unlawful for an employer to stipulate that upon getting married, a female employee shall be deemed resigned or separated from employment.[3]

Despite this safeguard, women employees are still discriminated in the workplace on account of their marriage. Often guised as a valid exercise of management prerogative, company policies violating Article 136 still pervade the corporate world.

The Supreme Court recently addressed this predicament in Dela Cruz-Cagampan vs. One Network Bank Inc. (ONBI), holding that an employer’s blanket policy of no-spouse employment is discriminatory.[4] Following a twelve-year legal battle, the Court found respondent ONBI’s “Exogamy Policy,” which prompted the dismissal of petitioner Catherine Dela Cruz-Cagampan (Catherine) after her marriage to her co-employee Audie Angelo Cagampan (Audie Angelo), is unlawful under the Labor Code absent a bona fide occupational qualification (BFOQ) exception.

The case

Catherine was hired by ONBI as an Accounting Specialist in 2004. In 2006, ONBI implemented the aforementioned “Exogamy Policy,” with the exception of co-employees who are already married to each other as of the end of April 2006.[5]

In October 2009, Catherine married Audie Angelo who served as a Loan Specialist in ONBI. In November of the same year, the couple requested permission from ONBI’s President to continue working for the bank. They even expressed that Audie Angelo may be transferred to other ONBI branches. However, ONBI’s Head of Human Resources denied the request and terminated Catherine’s employment. Catherine sought reconsideration, arguing that she was already employed prior to the policy’s effectivity, and that such policy contravenes Article 136 of the Labor Code. ONBI contrary position, however, constrained Catherine to file a case for illegal dismissal before the National Labor Relations Commission (NLRC).[6]

The Labor Arbiter ruled in favor of Catherine. On appeal, the NLRC affirmed the Labor Arbiter’s decision and found ONBI’s policy unreasonable for being grounded on mere speculation that the spouses may divulge to each other information about the accounts of their clients.[7] The NLRC also ruled that ONBI failed to prove the existence of legitimate business concern in implementing the “Exogamy Policy.”[8]

The Court of Appeals (CA) reversed the ruling of the NLRC and found that the ONBI’s policy was a valid exercise of management prerogative. The CA anchored its ruling on the BFOQ exception, which empowered ONBI to implement a policy that, while apparently discriminatory, is grounded on a reasonable business necessity.[9]

When the case reached the Supreme Court, the elements of BFOQ proved absent in the said case. The Court provided that these two (2) elements must concur to justify a policy on the ground of BFOQ: 1) the employment qualification is reasonably related to the essential operation of the job involved; and 2) there is a factual basis for believing that all, or substantially all persons meeting the qualification would be unable to properly perform duties of the job.[10]

The Court explained that ONBI’s “Exogamy Policy” was not reasonably related to its business operations. Citing the NLRC’s decision, the Court opined that ONBI failed to demonstrate how the security of its clients would be affected by complainant’s marriage to her co-employee.[11]

The Court also ruled that there is no factual basis in concluding that ONBI’s employees who marry each other would be unable to perform their duties, thereby warranting their dismissal. The Court found that while there is a host of employees in a bank that has varying functions, duties, and responsibilities, the policy was couched in a general manner, allowing ONBI to whimsically enforce the same.[12]

A closer look at the exception

The concept of BFOQ has been introduced as early as 1997 in Philippine Telegraph and Telephone Company (PT&T) vs. NLRC. In this case, Grace de Guzman, the employee, was terminated by PT&T upon contracting marriage, which was prohibited by company policies. The Court ruled in favor of de Guzman and held that PT&T’s policy violated Article 136 of the Labor Code.[13]

Nevertheless, the Court carved out an exception in the form of BFOQ. The Court ratiocinated that a company policy may be upheld through BFOQ where the requirements of the job would justify the same, but not on the ground of a general principle, such as the desirability of spreading work in the workplace. A requirement of that nature would be valid provided it reflects an inherent quality reasonably necessary for satisfactory job performance.[14]

This exception was best illustrated in Duncan Association vs. Glaxo Wellcome Philippines, Inc., where Glaxo, a pharmaceutical company, prohibited its employees from contracting marriage with employees of competitor companies. The Court, despite not having explicit reference to BFOQ, upheld the validity of the company policy, ruling that the prohibition against personal or marital relationships with employees of competitor is reasonable, because relationships of that nature might compromise the interests of the company. In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures.[15]

Meanwhile, the Court struck down a “no-spouse policy” in Star Paper Corp. vs. Ronaldo Simbol for lack of the reasonable business necessity requirement. In Star Paper, the Court found that the company failed to show how the marriage of petitioner, a Sheeting Machine Operator, to another employee from the Repacking Section could be detrimental to its business operations.[16] Because the policy is premised on mere fear that employees married to each other will be less efficient, the Court concluded that upholding the mandate will echo a policy that is based on an unproven presumption of perceived danger at the expense of an employee’s right to security of tenure.[17]

In finding the absence of BFOQ in Dela Cruz-Cagampan, the Court reaffirmed its previous rulings that termination on account of marriage cannot be countenanced absent any showing of reasonable business necessity. The Court also noted ONBI’s termination of Catherine instead of her husband, sans explanation on why she must be the one to leave.[18] Thus, an employer’s dismissal of a female employee solely because of her marriage is precisely the discrimination that the Labor Code expressly prohibits.[19]

We write this article to provide an overview about cases of illegal dismissal under Article 136 of the Labor Code. This article should not be taken as a form of legal advice. Should you need legal assistance on termination disputes and employment concerns, please send an email to ryan@romanolaw.ph.

[1]Const. Sec. 3, Art. XIII (1987)

[2] Art. 3, Chapter I, Labor Code of the Philippines

[3] Art. 136, Labor Code, supra

[4] Dela Cruz-Cagampan vs One Network Bank Inc. (ONBI), G.R. No. 217414, 22 June 2022

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id.