G.R. No. 217414 . June 22, 2022.
CATHERINE DELA CRUZ-CAGAMPAN, PETITIONER, VS. ONE NETWORK BANK, INC., [ONE NETWORK BANK]/OR ALEX V. BUENAVENTURA, PRESIDENT/MYRNA S. VIADO, HR HEAD, RESPONDENTS.

FACTS

Petitioner Catherine Dela Cruz-Cagampan was hired by respondent One Network Bank, Inc. on June 11, 2004, as an Accounting Specialist. On May 1, 2006, the bank implemented an “Exogamy Policy” stating that if two employees marry, one must terminate employment immediately after the marriage. On October 31, 2009, Catherine married her co-worker, Audie Angelo A. Cagampan, a Loan Specialist at the same bank. The couple requested permission to continue working, with the husband open to a transfer, but the bank, through its HR Head, denied the request and terminated Catherine’s employment on November 10, 2009. Catherine filed a complaint for illegal dismissal, arguing the policy was discriminatory under Article 136 of the Labor Code and that she was employed before the policy’s effectivity. The Labor Arbiter ruled in her favor, declaring the dismissal illegal and ordering reinstatement with backwages. The National Labor Relations Commission (NLRC) affirmed this decision. The Court of Appeals reversed the NLRC, holding the policy was a valid exercise of management prerogative due to a reasonable business necessity (protecting client confidentiality), and while finding substantive validity in the dismissal, awarded separation pay and nominal damages for lack of procedural due process. Catherine elevated the case to the Supreme Court via a Petition for Review on Certiorari.

ISSUE

Whether the Court of Appeals erred in reversing the NLRC’s decision, subsumed under which is whether One Network Bank’s “no-spouse” employment policy is lawful, thereby determining if Catherine Dela Cruz-Cagampan was illegally dismissed.

RULING

The Supreme Court GRANTED the Petition, REVERSED the Court of Appeals’ Decision, and REINSTATED the NLRC Decision affirming the Labor Arbiter’s ruling. Petitioner Catherine Dela Cruz-Cagampan was ILLEGALLY DISMISSED and is entitled to reinstatement and full backwages.
The Court held that an employer’s blanket policy of no-spouse employment is discriminatory. To justify such a policy, the employer must clearly establish a reasonable business necessity. The bank’s policy contravenes Article 136 of the Labor Code (renumbered Article 134), which prohibits discrimination against women on account of their marital status. The bank failed to discharge its burden of proving that the policy qualified as a bona fide occupational qualification (BFOQ). The mere assertion of a need to protect client confidentiality due to marital communication privilege was speculative and did not constitute a specific, compelling business necessity. The policy was a disproportionate response, as less restrictive measures (e.g., transfers, assigning different tasks) were available to address any potential conflicts of interest. The bank’s application of the policy was also inconsistent, as it retained other couples who married after the policy’s implementation, demonstrating discrimination. Consequently, the dismissal based on this invalid policy was without just cause, making it illegal. The award of nominal damages for procedural due process lapse was set aside, as an illegal dismissal negates any such award. Petitioner is entitled to reinstatement without loss of seniority rights and to full backwages, inclusive of allowances and other benefits, from the time of her dismissal until actual reinstatement.