Atty. Julius Gregory Delgado

DELA CRUZ-CAGAMPAN VS. ONE NETWORK BANK, ET AL., G.R. NO. 217414 (JUNE 22, 2022):
EMPLOYER’S FAILURE TO JUSTIFY BUSINESS NECESSITY RENDERS ITS NO-SPOUSE POLICY INVALID

On June 11, 2004, respondent One Network Bank, Inc. (“respondent Bank”) hired petitioner Catherine Dela Cruz-Cagampan (“petitioner Dela Cruz-Cagampan”) as an Accounting Specialist. On May 1, 2006, respondent Bank implemented its so-called Exogamy Policy which states that: “Effective May 1, 2006, when two employees working for One Network Bank are subsequently married through Church or Civil Court rites, one must terminate employment immediately after marriage. This policy shall not affect co-employees of the bank who are already married to each other as of the end of April 2006.” On October 31, 2009, petitioner Dela Cruz-Cagampan married her co-worker, Audie Angelo A. Cagampan, who served as Loan Specialist in respondent Bank. 

On November 4, 2009, the couple requested for permission from respondent Bank’s President, Alex V. Buenaventura, to continue working for the bank, similar to that given to other couples in its office. They expressed that Audie Angelo maybe transferred to other branches of the bank. The Human Resources Head, Myrna S. Viado, denied the request and terminated petitioner Dela Cruz-Cagampan’s employment. The latter sought for reconsideration but to no avail. Hence, petitioner Dela Cruz-Cagampan filed a case for illegal dismissal before the Labor Arbiter. The Labor Arbiter ruled in favor of petitioner Dela Cruz-Cagampan which was affirmed by the National Labor Relations Commission (“NLRC”). The NLRC ruled that respondent Bank’s “mere fear that of the possibility that the spouses may divulge to each other information with respect to client’s accounts is speculative, unfounded and imaginary.” The Court of Appeals, however, reversed and set aside the ruling of the NLRC and held that this occupational qualification exception is necessitated by the bank’s fiduciary duty to maintain confidentiality. 

When the case was elevated before the Supreme Court, the Court reversed and set aside the ruling of the Court of Appeals and struck down respondent Bank’s policy as discriminatory. The Court cited the Magna Carta of Women which mandates the State to eliminate discrimination against women and ensures their right to freely choose a spouse. The Court also cited Article 136 of the Labor Code which states that “It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage.” The Court held that an employer’s dismissal of a female employee solely because of her marriage is precisely the discrimination the Labor Code expressly prohibits. 

Citing the case of Star Paper Corporation vs. Simbol, G.R. No. 164774 (April 12, 2006), the Supreme Court held that bona fide occupational qualification may justify a “no-spouse employment policy” as long as the following elements are present: 1) the employment qualification is reasonably related to the essential operation of the job involved; and 2) that there is factual basis for believing that all or substantially all persons meeting the qualification would be unable to perform the duties of the job. 

On the first element, the Supreme Court held that the no-spouse qualification of respondent Bank is not reasonably related to the bank’s essential operation of its business. The Court held that there is no iota of proof that supports respondent Bank’s assertion that petitioner’s marriage to her co-employee places the bank’s funds at risk of embezzlement. The Court also held that the Court of Appeals erred in heavily relying on the bank’s fiduciary duty and high standards of diligence as justification for immediate dismissal of an employee who marries a co-employee. The Court held that the respondent Bank could have transferred one of them to another branch and/or implement stronger confidentiality measures. 

As to the second element, the Supreme Court held that there is no factual basis to conclude that that all their employees who marry each other would be unable to perform their duties, entailing one’s dismissal. The Court held that the policy was couched in a general manner, that whenever any two of their employees marry, one must terminate his or her employment immediately after marriage. The Court held that there is a host of employees in a bank that have varying functions, duties, and responsibilities. The general articulation allows respondent Bank to whimsically enforce its policy, as petitioner Cagampan-Dela Cruz alleged that others had been spared. 
In this case, the Supreme Court also cited the case of Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome Philippines, Inc., G.R. No. 162994 (September 17, 2004), wherein the Supreme Court justified the exercise of management prerogative of Glaxo when it reassigned a medical representative to another place because he married his counterpart in Astra. The occupation qualification exception was anchored on the business necessity to avoid conflict of interest and protect trade secrets of Glaxo. Hence, for an exercise of management prerogative to be valid on policies anchored on employee’s marital status or act of marriage, the employer must be able to justify its business necessity showing that the requisites laid down in Star Paper Corporation vs. Simbol, supra, are present.