The Supreme Court (SC) has ruled: “An employer’s blanket policy of no-spouse employment is discriminatory. To justify its enforcement, the employer must clearly establish a reasonable business necessity.”
With the ruling, the SC ordered the reinstatement of Catherine Dela Cruz-Cagampan as accounting specialist of One Network Bank, Inc. (ONBI).
The SC, in a decision written by Senior Associate Justice Marvic M.V.F. Leonen, ordered ONBI to pay Catherine her backwages, proportionate 13th month pay for 2010, allowances and other benefits of their monetary equivalent from the time she was illegal dismissed on Feb. 17, 2010.
Catherine is also entitled to a 10 per cent 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’s decision reversed the 2014 ruling of the Court of Appeals (CA) which overturned that issued by the National Labor Relations Commission (NLRC) which found Catherine illegally dismissed.
Case records showed that Catherine married on Oct. 31, 2009 her co-worker Audie Angelo who was a loan specialist at ONBI. At the time of marriage, Catherine 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. Catherine’s employment was terminated.
Catherine 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 stressed 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 Catherine illegal dismissed and ordered her reinstatement.
On appeal before the CA, the appellate court reversed the NLRC with a 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.
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 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.’
“Under the Magna Carta of Women, the State commits to eliminate discrimination against women and ensures their right to freely choose a spouse. Particularly, Article 134 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.
“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.
“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
“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 Court of Appeals 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. Respondents may likewise implement stronger confidentiality measures that do not impinge on employees’ right to security of tenure.
“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.
“Contrary to the Court of Appeals’ Decision, we find 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.
“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.
“WHEREFORE, the Petition for Review on Certiorari is GRANTED. The Court of Appeals’ July 31, 2014 Decision and February 10, 2015 Resolution in CA-G.R. SP No. 04589-MIN are REVERSED and SET ASIDE.
“The Labor Arbiter’s October 29, 2010 Decision in NLRC MAC-02- 011915-2011 (RAB-X-04-00198-2010) is REINSTATED with MODIFICATION.
“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.”