Is a company’s no marriage policy absolutely prohibited?

Catherine was an accounting specialist with One Network Bank Inc. Audie was likewise employed by the same bank as a loan specialist. The two met at work, fell in love, and married in 2009.

Three years before their marriage, the bank put in place what it called an “Exogamy Policy,” which basically states that when two employees working for the bank are subsequently married, one must terminate his/her employment with the bank immediately. Because of this, Catherine and Audie requested permission from the bank president to continue working for the bank, with Audie volunteering to transfer to a different branch.

Their request was denied and the bank terminated Catherine’s employment, which prompted her to file a complaint for illegal dismissal against the bank.

This is the case of Catherine dela Cruz-Cagampan v. One Network Bank Inc., et al. (GR 217414, June 22, 2022), where the Labor Arbiter and the NLRC found in favor of Catherine, and declared that she was illegally dismissed.

The NLRC, in confirming the Labor Arbiter’s finding of illegal dismissal, stated that mere fear of the possibility that the spouses may divulge confidential information to each other is speculative, unfounded, and imaginary. It further declared that the bank failed to prove the legitimate business concern in implementing its discriminatory policy against its employees.

The Court of Appeals reversed the NLRC decision and ruled in favor of the bank declaring that the bank was justified in terminating the employment of Catherine as it had presented a reasonable business necessity in implementing its Exogamy Policy. According to the Court of Appeals, the policy against marriage of employees was a valid exercise of the bank’s management prerogative. Since the bank was a business imbued with public interest, they must observe the highest degree of diligence in handling the banking affairs, which includes its obligation to protect confidential information of its clients.

The Supreme Court then reversed the Court of Appeals, and ruled in favor of Catherine. In its decision, the Court observed that our Constitution mandates that the State must afford full protection to labor, and promote full employment and equality of employment opportunities for all, as well as guarantees the right of all workers to security of tenure.

Moreover, Article 134 of the Labor Code provides that it shall be unlawful for an employer to require as a condition of employment or continuation of employment, that a female employee shall not get married, to stipulate that upon getting married, a female employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a female employee merely by reason of her being married.

The Supreme Court reminded employers that a claim of management prerogative does not automatically absolve it of liability. It is not unbridled and limitless, nor beyond the scrutiny of the courts. Where abusive and oppressive, the business decision must be tempered to safeguard the constitutional guarantee of providing full protection to labor. Surely, management prerogative cannot justify violation of law or the pursuit of any arbitrary or malicious motive. (Philippine Airlines, Inc. v. Dawal, G..R. No. G.R. No. 173921, February 24, 2016)

Notwithstanding the foregoing, this does not mean that a prohibition on marriage imposed by the employer is absolutely prohibited.

In the dela cruz-Cagampan case, the Supreme Court referred to its ruling in the case of Star Paper Corp. v. Simbol (G.R. No. 164774, April 12, 2006), where it laid down the principle of bona fide occupational qualification which may allow an employer’s stipulation against marriage for as long as the employer can hurdle the following standards: (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.

As the Exogamy Policy of One Network Bank did not pass the standards set by the bona fide occupational qualification, the Supreme Court ruled that Catherine was illegally dismissed.

Firstly, it found that the no-spouse qualification had no reasonable relation to the bank’s essential operation of its business. The mere fear of the possibility that the spouses may divulge confidential information to each other is speculative, unfounded, and imaginary, and there is no proof at all that Catherine’s marriage to Audie places the bank’s funds at risk of embezzlement.

Secondly, the bank’s policy against marriage was couched in a general manner, that whenever any two of their employees marry, one must terminate employment immediately after marriage. There was no proof that all employees of the bank who marry each other would be unable to perform their duties requiring their dismissal.

While the Supreme Court struck down the no-marriage policy in the dela cruz-Cagampan case, in the earlier case of Duncan Association of Detailman-PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines Inc., the Supreme Court affirmed the right of an employer to impose the rule which prohibits marriage of its employees to someone who is employed with a competitor company.

In the Glaxo case, Tecson was an employee of Glaxo Wellcome Philippines Inc. and he entered into a romantic relationship and eventually married Bettsy, who was an employee of Astra Pharmaceuticals, a competitor of Glaxo.

The Supreme Court declared that Glaxo has the right to protect its economic interests and that the Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to expansion and growth.

Further, the Supreme Court declared that while our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers.

In view of the foregoing, in prescribing qualifications and prohibitions for their employees, companies and employers should be mindful of the bona fide occupational qualification rule which mandates that these should be reasonably related to the essential operation of the job involved and there must be 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.

(The author, Atty. John Philip C. Siao, is a practicing lawyer and founding partner of Tiongco Siao Bello & Associates Law Offices, a professor at the MLQU School of Law, and an Arbitrator of the Construction Industry Arbitration Commission of the Philippines. He may be contacted at [email protected]. The views expressed in this article belong to the author alone.)