No-spouse employment policy is illegal where it fails to meet the two elements required for its validity. A bona fide occupational qualification requires the concurrence of two elements: (1) that the employment qualification is reasonably related to the essential operation of the job involved; and, (2) that there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job.

Thus, the SC held in the case of

Dela Cruz-Cagampan vs. One Network Bank, Inc.,

G.R. No. 217414, June 22, 2022


One Network Bank, Inc. hired Catherine as an Accounting Specialist.On May 1, 2006, it implemented what it called an “Exogamy Policy,” which stated:

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, Catherine married her co-worker, Audie Angelo A. Cagampan (Audie Angelo), who served as a Loan Specialist in One Network Bank.

On November 4, 2009, the couple requested for permission from One Network Bank President Alex V.

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Buenaventura (Buenaventura) to continue working for the bank, similar to that given to other couples in its office. They expressed that Audie Angelo may be transferred to other One Network Bank branches.

On November 10, 2009, the Head of Human Resources, Myrna S. Viado (Viado), denied the request and terminated Catherine’s employment.

On February 1, 2010, Catherine sought reconsideration, pointing out that the policy cannot be applied to her case because she was employed prior to its effectivity. Further, she argued that the exogamy policy contradicts Article 136 of the Labor Code which prohibits practices that discriminate against marriage.

This remained unheeded, prompting her to file a Complaint for illegal dismissal against One Network Bank, Inc. and its officers (ONBI, et al.).

LA Ruling:

The Labor Arbiter (LA) rendered its Decision, ruling that Catherine was illegally dismissed. It ordered One Network Bank to reinstate Catherine and pay her money claims.

NLRC Ruling:

On appeal, the National Labor Relations Commission (NLRC) rendered its Decision affirming the Labor Arbiter’s ruling.

The National Labor Relations Commission found that One Network Bank’s policy was unreasonable considering that the “mere fear of the possibility that the spouses may divulge to each other information with respect to client’s accounts is speculative, unfounded, and imaginary.”

It ruled that One Network Bank failed to prove the legitimate business concern in implementing the discriminatory policy against its employees. The NLRC also denied denying One Network Bank’s motion for reconsideration.

One Network Bank filed a Petition for Certiorari with Application for Issuance of Temporary Restraining Order before the Court of Appeals (CA). It argued that the National Labor Relations Commission committed grave abuse of discretion amounting to lack or excess of jurisdiction in finding that Catherine was illegally dismissed despite Catherine and her husband’s willful violation of a policy they have known long beforehand.

CA Ruling:

The Court of Appeals granted One Network Bank’s petition.

It found that One Network Bank’s policy was a valid exercise of management prerogative. Hence, there was a just cause in dismissing Catherine.

It explained that the bank presented a reasonable business necessity in implementing the assailed company policy. Also known as the bona fide occupational qualification exception, this necessity originates from One Network Bank’s business that is imbued with public interest.

Since One Network Bank must observe the highest degree of diligence in handling its affairs, the policy is necessary to protect the confidential information of its clients and minimize risks from married co-employees whose communication is privileged.

Catherine’s Motion for Reconsideration was denied in the Court of Appeals.  Hence, Catherine filed the Petition for Review on Certiorari with the Supreme Court (SC).


Whether or not terminating an employee for marrying a co-employee constitutes illegal dismissal

SC Ruling:

The SC granted the petition.

The SC held that 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 [formerly 136] of the Labor Code prohibits employers from discriminating women employees.

ONBI, et al. implemented a policy stating that “when two employees working for One Network Bank are subsequently married through Church or Civil Court rites, one must terminate employment immediately after marriage. They then terminated Dela Cruz-Cagampan’s employment for her violation of the company policy. Interestingly, her husband’s employment was retained.

Apart from the couple’s supposed transgression when they married, ONBI, et al. did not state any other reason why they dismissed Dela Cruz-Cagampan. Further, ONBI, et al. consistently argued that the couple willingly violated the company policy despite their knowledge of it.

While ONBI, et al. maintain that Dela Cruz-Cagampan and her husband both knowingly transgressed the rule, nothing in the records show why ONBI, et al. dismissed Dela Cruz-Cagampan in particular. To stress, they opted to terminate Dela Cruz-Cagampan’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. The SC held that it cannot countenance ONBI, et al.’ 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.

Philippine Airlines, Inc. vs. Dawal explained that an employer’s management prerogative may not be premised on unlawful causes nor excuse unlawful acts.

In determining whether an employer’s policy prohibiting spouses from working in the same company or a “no-spouse employment policy” is unlawful, Star Paper Corp. v. Simbol discussed the bona fide occupational qualification that may possibly justify it.

Thus, a bona fide occupational qualification requires the concurrence of two elements: “(1) that the employment qualification is reasonably related to the essential operation of the job involved; and, (2) that there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job.

Star Paper Corp. continued that in this jurisdiction, the standard of reasonableness is employed in determining whether an otherwise discriminatory practice may be excused.

Substantial evidence is the quantum of proof required in labor cases. It is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”1 To justify their otherwise discriminatory policy, ONBI, et al. have the burden to establish by substantial evidence the reasonable necessity for it. They must show that no other alternative to the policy exists.

Weighed against the constitutionally mandated full protection to labor and the various statutory protections accorded to the sector, the SC found that ONBI, et al. failed to demonstrate the reasonable business necessity for its no-spouse employment policy.

First, the no-spouse qualification is not reasonably related to the bank’s essential operation of its business. It unduly discourages all employees from marrying a fellow worker at the pain of termination.

The National Labor Relations Commission’s disposition was based on Star Paper Corp., the prevailing jurisprudence. We find that there is no iota of proof that supports ONBI, et al.’ assertion that Dela Cruz-Cagampan’s marriage to her fellow employee places the bank’s. funds at risk for embezzlement. The reasonable relation between a discriminatory policy and the employer’s industry that shall excuse its implementation must be based on facts, not mere surmises. We agree that ONBI, et al.’ fear is more imagined than real.

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 Dela Cruz-Cagampan pointed out, ONBI, et al. 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. ONBI, et al. may likewise implement stronger confidentiality measures that do not impinge on employees’ right to security of tenure.

Second, 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.53 There is a host of employees in a bank that have varying functions, duties, and responsibilities.

The general articulation allows ONBI, et al. to whimsically enforce its policy, as Dela Cruz-Cagampan alleged here that others had been spared. Further, it leaves them the option on which employee’s services to terminate. Here, they arbitrarily dismissed Dela Cruz-Cagampan. The basic tenets of due process cannot allow this.

Contrary to the Court of Appeals’ Decision, we find that ONBI, et al.’ no-spouse employment policy cannot justify Dela Cruz-Cagampan’s dismissal. The National Labor Relations Commission did not gravely abuse its discretion, as nothing was whimsical, capricious, or arbitrary in finding that Dela Cruz-Cagampan was illegally dismissed. A reasonable business necessity must be clearly shown to excuse a discriminatory exercise of management prerogative.

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