PRUBANKERS ASSOCIATION, Petitioner, v.

PRUDENTIAL BANK & TRUST

COMPANY, Respondent.

Facts:

 On November 18, 1993, the Regional Tripartite Wages and Productivity Board
of Region V issued Wage Order No. RB 05-03 which provided for a Cost-of-
Living Allowance (COLA) to workers in the private sector who ha[d] rendered
service for at least three (3) months before its effectivity, and for the same
period.
 Subsequently on November 23, 1993, the Regional Tripartite Wages and
Productivity Board of Region VII issued Wage Order No. RB VII-03, which
directed the integration of the COLA mandated pursuant to Wage Order No.
RO VII-02-A into the basic pay of all workers. It also established an increase
in the minimum wage rates for all workers and employees in the private
sector.
 The petitioner then granted a COLA of P17.50 to its employees at its Naga
Branch, the only branch covered by Wage Order No. RB 5-03, and integrated
the P150.00 per month COLA into the basic pay of its rank-and-file employees
at its Cebu, Mabolo and P. del Rosario branches, the branches covered by
Wage Order No. RB VII-03.
 On June 7, 1994, respondent Prubankers Association wrote the petitioner
requesting that the Labor Management Committee be immediately convened
to discuss and resolve the alleged wage distortion created in the salary
structure upon the implementation of the said wage orders.
 Respondent Association then demanded in the Labor Management
Committee meetings that the petitioner extend the application of the wage
orders to its employees outside Regions V and VII.
 As the grievance could not be settled in the said meetings, the parties agreed
to submit the matter to voluntary arbitration.
 The issue presented before the Committee was whether or not the bank’s
separate and regional implementation of Wage Order No. 5-03 at its Naga
Branch and Wage Order No. VII-03 at its Cebu, Mabolo and P. del Rosario
branches, created a wage distortion in the bank nationwide.
 CA Ruling: held that the variance in the salary rates of employees in different
regions of the country was justified by RA 6727. Furthermore, the Court of
Appeals ruled that "the distinctions between each employee group in the
region are maintained, as all employees were granted an increase in
minimum wage rate."

ISSUE:

whether or not a wage distortion resulted from respondent’s implementation of

the aforecited Wage Orders.
RULING:

No.

ARTICLE 124. Standards/Criteria for Minimum Wage Fixing:

A wage distortion shall mean a situation where an increase in prescribed wage

results in the elimination or severe contraction of intentional quantitative
differences in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service, or other logical bases of
differentiation. Law

In the present case, it is clear that no wage distortion resulted when respondent
implemented the subject Wage Orders in the covered branches. In the said
branches, there was an increase in the salary rates of all pay classes.
Furthermore, the hierarchy of positions based on skills, length of service and
other logical bases of differentiation was preserved. In other words, the
quantitative difference in compensation between different pay classes remained
the same in all branches in the affected region. Put differently, the distinction
between Pay Class 1 and Pay Class 2, for example, was not eliminated as a result
of the implementation of the two Wage Orders in the said region. Hence, it
cannot be said that there was a wage distortion.
Yrasuegi v. Philippine Airlines, Inc.
G.R. No. 168081, 17 October 2008

THIS case portrays the peculiar story of an international flight steward who was
dismissed because of his failure to adhere to the weight standards of the airline
company.

FACTS:

 In 1984, the weight problem started, which prompted PAL to send him to an
extended vacation until November 1985. He was allowed to return to work
once he lost all the excess weight. But the problem recurred. He again went
on leave without pay from October 17, 1988 to February 1989.
 Despite the lapse of a ninety-day period given him to reach his ideal weight,
petitioner remained overweight. On January 3, 1990, he was informed of the
PAL decision for him to remain grounded until such time that he satisfactorily
complies with the weight standards. Again, he was directed to report every
two weeks for weight checks, which he failed to comply with.
 On April 17, 1990, petitioner was formally warned that a repeated refusal to
report for weight check would be dealt with accordingly. He was given another
set of weight check dates, which he did not report to.
On November 13, 1992, PAL finally served petitioner a Notice of
Administrative Charge for violation of company standards on weight
requirements. Petitioner insists that he is being discriminated as those
similarly situated were not treated the same.
 On June 15, 1993, petitioner was formally informed by PAL that due to his
inability to attain his ideal weight, “and considering the utmost leniency”
extended to him “which spanned a period covering a total of almost five (5)
years,” his services were considered terminated “effective immediately.”
 LABOR ARBITER: held that the weight standards of PAL are reasonable in
view of the nature of the job of petitioner. However, the weight standards
need not be complied with under pain of dismissal since his weight did not
hamper the performance of his duties.
 NLRC affirmed.
 CA: the weight standards of PAL are reasonable. Thus, petitioner was legally
dismissed because he repeatedly failed to meet the prescribed weight
standards. It is obvious that the issue of discrimination was only invoked by
petitioner for purposes of escaping the result of his dismissal for being
overweight.

ISSUE:
WON PETITIONER'S DISMISSAL FOR OBESITY CAN BE PREDICATED ON THE
"BONA FIDE OCCUPATIONAL QUALIFICATION (BFOQ) DEFENSE”.
RULING:

Employment in particular jobs may not be limited to persons of a particular sex,

religion, or national origin unless the employer can show that sex, religion, or
national origin is an actual qualification for performing the job.

The qualification is called a bona fide occupational qualification (BFOQ).

the Constitution, the Labor Code, and RA No. 7277 or the Magna Carta for Disabled
Persons contain provisions similar to BFOQ.
"Meiorin Test" determining whether an employment policy is justified.
Under this test,
(1) the employer must show that it adopted the standard for a purpose rationally
connected to the performance of the job;
(2) the employer must establish that the standard is reasonably necessary to the
accomplishment of that work-related purpose and
(3) the employer must establish that the standard is reasonably necessary in order
to accomplish the legitimate work-related purpose.
in order to justify a BFOQ, the employer must prove that:
(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 properly perform the duties of the job.
In short, BFOQ is valid "provided it reflects an inherent quality reasonably necessary
for satisfactory job performance."... the weight standards of PAL are... reasonable.
A common carrier, from the nature of its business and for reasons of public policy, is
bound to observe extraordinary diligence for the safety of the passengers it
transports. It is bound to carry its passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with due
regard for all the circumstances.
Thus, it is only logical to hold that the weight standards of PAL show its effort to
comply with the exacting obligations imposed upon it by law by virtue of being a
common carrier.
the primary objective of PAL in the imposition of the weight standards for cabin crew
is flight safety.
cabin attendants must always maintain agility to inspire passenger confidence on
their ability to care for the passengers when something goes wrong.
The most important activity of the cabin crew is to care for the safety of passengers
and the evacuation of the aircraft when an emergency occurs.
Truly, airlines need cabin attendants who have the necessary strength to open
emergency doors, the agility to attend to passengers in cramped working conditions,
and the stamina to withstand grueling flight schedules.
That an obese cabin attendant occupies more space than a slim one is an
unquestionable fact which courts can judicially recognize without introduction of
evidence.
The biggest problem with an overweight cabin attendant is the possibility of
impeding passengers from evacuating the aircraft, should the occasion call for it.
V. Petitioner is entitled to separation pay.
Normally, a legally dismissed employee is not entitled to separation pay. This may
be deduced from the language of Article 279 of the Labor Code that "[a]n employee
who is unjustly dismissed from work shall be entitled to reinstatement without loss
of seniority rights and... other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of his actual
reinstatement."
Exceptionally, separation pay is granted to a legally dismissed employee as an act
"social justice,"[101] or based on "equity."[102] In both instances, it is required that
the dismissal (1) was not for serious misconduct; and (2) does... not reflect on the
moral character of the employee.
G.R. No. 167217 February 4, 2008
P.I.MANUFACTURING,INCORPORATED, petitioner,
vs.P.I. MANUFACTURING SUPERVISORS AND FOREMAN ASSOCIATION and
the NATIONAL LABOR UNION, respondents.

FACTS:

 Petitioner P.I. Manufacturing, Incorporated is a domestic corporation engaged

in the manufacture and sale of household appliances. On the other hand,
respondent P.I. Manufacturing Supervisors and Foremen Association
(PIMASUFA) is an organization of petitioner’s supervisors and foremen, joined
in this case by its federation, the National Labor Union (NLU).

 On December 10, 1987, the President signed into law Republic Act (R.A.)
No. 66402 providing, among others, an increase in the statutory minimum
wage and salary rates of employees and workers in the private sector.

 Thereafter, on December 18, 1987, petitioner and respondent PIMASUFA

entered into a new Collective Bargaining Agreement (1987 CBA) whereby the
supervisors were granted an increase of P625.00 per month and the
foremen, P475.00 per month. The increases were made retroactive to May
12, 1987, or prior to the passage of R.A. No. 6640, and every year
thereafter until July 26, 1989.

 On January 26, 1989, respondents PIMASUFA and NLU filed a complaint with
the Arbitration Branch of the National Labor Relations Commission (NLRC),
docketed as NLRC-NCR Case No. 00-01-00584, charging petitioner with
violation of R.A. No. 6640.

 Respondents attached to their complaint a numerical illustration of wage

distortion resulting from the implementation of R.A. No. 6640.

 Labor Arbiter Decision: Labor Arbiter rendered his Decision in favor of

respondents. Petitioner was ordered to give the members of respondent
PIMASUFA wage increases equivalent to 13.5% of their basic pay they were
receiving prior to December 14, 1987.

 On appeal by petitioner, the NLRC, in its Resolution dated January 8, 1991,

affirmed the Labor Arbiter’s judgment.

 CA’s decision: the members of private respondent union entitled to the

increase of their basic pay due to wage distortion by reason of the
implementation of RA 6640. the increase of 13.5% in the supervisors and
foremen’s basic salary must further be increased to 18.5% to correct the
wage distortion brought about by the implementation of RA 6640.

ISSUE:

 Whether the implementation of R.A. No. 6640 resulted in a wage distortion

and whether such distortion was cured or remedied by the 1987 CBA.

RULING:
YES.

Wage distortion means the disappearance or virtual disappearance of pay

differentials between lower and higher positions in an enterprise because of
compliance with a wage order.

The court is convinced that the same were cured or remedied when respondent
PIMASUFA entered into the 1987 CBA with petitioner after the effectivity of R.A. No.
6640. The 1987 CBA increased the monthly salaries of the supervisors
by P625.00 and the foremen, by P475.00, effective May 12, 1987. These
increases re-established and broadened the gap, not only between the
supervisors and the foremen, but also between them and the rank-and-file
employees.

To direct petitioner to grant an across-the-board increase to all of them, regardless

of the amount of wages they are already receiving, would be harsh and unfair to the
former. As we ruled in Metropolitan Bank and Trust Company Employees Union ALU-
TUCP v. NLRC:

Xx To compel employers simply to add on legislative increases in

salaries or allowances without regard to what is already being paid, would be
to penalize employers who grant their workers more than the statutory
prescribed minimum rates of increases. Clearly, this would be counter-
productive so far as securing the interests of labor is concerned. Xx

At this juncture, it must be stressed that a CBA constitutes the law between the
parties when freely and voluntarily entered into.13 Here, it has not been shown
that respondent PIMASUFA was coerced or forced by petitioner to sign the 1987
CBA. They signed it fully aware of the passage of R.A. No. 6640. The goal of
collective bargaining is the making of agreements that will stabilize business
conditions and fix fair standards of working conditions.
G.R. No. 164774 April 12, 2006

STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN

CHUA, Petitioners,
vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E.
ESTRELLA, Respondents.

FACTS:

 Petitioner Star Paper Corporation (the company) is a corporation engaged in

trading – principally of paper products.
 Josephine Ongsitco is its Manager of the Personnel and Administration
Department while Sebastian Chua is its Managing Director.
 The evidence for the petitioners show that respondents Ronaldo D. Simbol
(Simbol), Wilfreda N. Comia (Comia) and Lorna E. Estrella (Estrella) were all
regular employees of the company.
 Simbol was employed by the company on October 27, 1993. He met Alma
Dayrit, also an employee of the company, whom he married on June 27,
1998. Prior to the marriage, Ongsitco advised the couple that should they
decide to get married, one of them should resign pursuant to a company
policy promulgated in 1995 which reads as follows;
o New applicants will not be allowed to be hired if in case he/she has [a]
relative, up to [the] 3rd degree of relationship, already employed by
the company.
o In case of two of our employees (both singles [sic], one male and
another female) developed a friendly relationship during the course of
their employment and then decided to get married, one of them should
resign to preserve the policy stated above.
 Simbol resigned on June 20, 1998 pursuant to the company policy.
 Comia was hired by the company on February 5, 1997. She met Howard
Comia, a co-employee, whom she married on June 1, 2000. Ongsitco likewise
reminded them that pursuant to company policy, one must resign should they
decide to get married. Comia resigned on June 30, 2000.
 Estrella was hired on July 29, 1994. She met Luisito Zuñiga (Zuñiga), also a
co-worker. Petitioners stated that Zuñiga, a married man, got Estrella
pregnant. The company allegedly could have terminated her services due to
immorality but she opted to resign on December 21, 1999.
 The respondents each signed a Release and Confirmation Agreement. They
stated therein that they have no money and property accountabilities in the
company and that they release the latter of any claim or demand of whatever
nature.
 The respondents offer a different version of their dismissal:
 o Simbol and Comia allege that they did not resign voluntarily; they
were compelled to resign in view of an illegal company policy.
o As to respondent Estrella, she alleges that she had a relationship with
co-worker Zuñiga who misrepresented himself as a married but
separated man. she met an accident. She was nonetheless dismissed
by the company. Due to her urgent need for money, she later
submitted a letter of resignation in exchange for her thirteenth month
pay.
 Respondents later filed a complaint for unfair labor practice, constructive
dismissal, separation pay and attorney’s fees. They averred that the company
policy is illegal and contravenes Article 136 of the Labor Code. They also
contended that they were dismissed due to their union membership.
 LA’s Decision:
o Labor Arbiter Melquiades Sol del Rosario dismissed the complaint for
lack of merit. That the company policy was decreed pursuant to what
the respondent corporation perceived as management prerogative.
 NLRC:
o the Commission affirmed the decision of the Labor Arbiter on January
11, 2002.
 Respondents filed a Motion for Reconsideration but was denied by the NLRC.
 CA:
o Decision of the National Labor Relations Commission is hereby
REVERSED and SET ASIDE:
 Declaring illegal, the petitioners’ dismissal from employment
and ordering private respondents to reinstate petitioners to their
former positions without loss of seniority rights with full
backwages from the time of their dismissal until actual
reinstatement; and
 Ordering private respondents to pay petitioners attorney’s fees
amounting to 10% of the award and the cost of this suit.

ISSUE:

WON the subject 1995 policy/regulation is violative of the constitutional rights

towards marriage and the family of employees and of Article 136 of the Labor Code

RULING:

YES.

In bona fide occupational qualification exception, unless the employer can

prove that the reasonable demands of the business require a distinction based on
marital status and there is no better available or acceptable policy which would
better accomplish the business purpose, an employer may not discriminate against
an employee based on the identity of the employee’s spouse.

To justify a bona fide occupational qualification, the employer must prove two
factors: (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.
In the recent case of Duncan Association of Detailman-PTGWO and Pedro
Tecson v. Glaxo Wellcome Philippines, Inc.

we passed on the validity of the policy of a pharmaceutical company

prohibiting its employees from marrying employees of any competitor
company. We considered the prohibition against personal or marital
relationships with employees of competitor companies upon Glaxo’s
employees reasonable under the circumstances because relationships of that
nature might compromise the interests of Glaxo.

The requirement that a company policy must be reasonable under the

circumstances to qualify as a valid exercise of management prerogative was also at
issue in the 1997 case of Philippine Telegraph and Telephone Company v.
NLRC.36 In said case, the employee was dismissed in violation of petitioner’s policy
of disqualifying from work any woman worker who contracts marriage. We held that
the company policy violates the right against discrimination afforded all women
workers under Article 136 of the Labor Code

[A] requirement that a woman employee must remain unmarried could be justified
as a "bona fide occupational qualification," or BFOQ, where the particular
requirements of the job would justify the same, but not on the ground of a general
principle, such as the desirability of spreading work in the workplace. A requirement
of that nature would be valid provided it reflects an inherent quality reasonably
necessary for satisfactory job performance.

The cases of Duncan and PT&T instruct us that the requirement of reasonableness
must be clearly established to uphold the questioned employment policy. The
employer has the burden to prove the existence of a reasonable business necessity.
The burden was successfully discharged in Duncan but not in PT&T.

Petitioners’ sole contention that "the company did not just want to have two (2) or
more of its employees related between the third degree by affinity and/or
consanguinity" is lame. That the second paragraph was meant to give teeth to the
first paragraph of the questioned rule is evidently not the valid reasonable business
necessity required by the law.

It is significant to note that in the case at bar, respondents were hired after they
were found fit for the job, but were asked to resign when they married a co-
employee. Petitioners failed to show how the marriage, could be detrimental to its
business operations.

The questioned policy may not facially violate Article 136 of the Labor Code but it
creates a disproportionate effect and under the disparate impact theory, the only
way it could pass judicial scrutiny is a showing that it is reasonable despite the
discriminatory, albeit disproportionate, effect.

Thus, for failure of petitioners to present undisputed proof of a reasonable business

necessity, we rule that the questioned policy is an invalid exercise of management
prerogative.
G.R. No. 162994 September 17, 2004

DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A.

TECSON, petitioners,
vs.
GLAXO WELLCOME PHILIPPINES, INC., Respondent.

FACTS:

 Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome

Philippines, Inc. (Glaxo) as medical representative on October 24, 1995, after
Tecson had undergone training and orientation.
 Thereafter, Tecson signed a contract of employment which stipulates, among
others, that he agrees to study and abide by existing company rules; to
disclose to management any existing or future relationship by consanguinity
or affinity with co-employees or employees of competing drug companies and
should management find that such relationship poses a possible conflict of
interest, to resign from the company.
 Subsequently, Tecson entered into a romantic relationship with Bettsy, an
employee of Astra Pharmaceuticals3 (Astra), a competitor of Glaxo. Bettsy
was Astra’s Branch Coordinator in Albay.
 Even before they got married, Tecson received several reminders from his
District Manager regarding the conflict of interest which his relationship with
Bettsy might engender.
 In September 1999, Tecson applied for a transfer in Glaxo’s milk division,
thinking that since Astra did not have a milk division, the potential conflict of
interest would be eliminated. His application was denied in view of Glaxo’s
"least-movement-possible" policy.
 In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-
Agusan del Sur sales area. Tecson asked Glaxo to reconsider its decision, but
his request was denied.
 Glaxo, however, remained firm in its decision and gave Tescon until February
7, 2000 to comply with the transfer order. Tecson defied the transfer order
and continued acting as medical representative in the Camarines Sur-
Camarines Norte sales area.
 Because the parties failed to resolve the issue at the grievance machinery
level, they submitted the matter for voluntary arbitration. Glaxo offered
Tecson a separation pay of one-half (½) month pay for every year of service,
or a total of ₱50,000.00 but he declined the offer.
 The National Conciliation and Mediation Board (NCMB) rendered
its Decision declaring as valid Glaxo’s policy on relationships between its
employees and persons employed with competitor companies and affirming
Glaxo’s right to transfer Tecson to another sales territory.
  Aggrieved, Tecson filed a Petition for Review with the Court of Appeals
assailing the NCMB Decision.
 CA decision:
o The appellate court held that Glaxo’s policy prohibiting its employees
from having personal relationships with employees of competitor
companies is a valid exercise of its management prerogatives.

ISSUE:

WON the policy was a valid exercise of its management perogatives.

RULING:

YES.

Glaxo’s policy prohibiting an employee from having a relationship with an employee

of a competitor company is a valid exercise of management prerogative. Glaxo has a
right to guard its trade secrets, manufacturing formulas, marketing strategies and
other confidential programs and information from competitors, especially so that it
and Astra are rival companies in the highly competitive pharmaceutical industry.

Glaxo only aims to protect its interests against the possibility that a competitor
company will gain access to its secrets and procedures. Because relationships of that
nature might compromise the interests of the company.

“The policy being questioned is not a policy against marriage. An employee of the
company remains free to marry anyone of his or her choosing. The policy is not
aimed at restricting a personal prerogative that belongs only to the individual.
However, an employee’s personal decision does not detract the employer from
exercising management prerogatives to ensure maximum profit and business
success.”

Since Tecson knowingly and voluntarily entered into a contract of employment with
Glaxo, the stipulations therein have the force of law between them and, thus, should
be complied with in good faith." He is therefore estopped from questioning said
policy.

As held in a Georgia, U.S.A case, the court ruled than an employer that discharged
an employee who was married to an employee of an active competitor did not
violate Title VII of the Civil Rights Act of 1964. The Court pointed out that the policy
was applied to men and women equally and noted that the employer’s business was
highly competitive and that gaining inside information would constitute a competitive
advantage.

Note: there was no constructive dismissal.

Constructive dismissal is defined as a quitting, an involuntary resignation resorted to

when continued employment becomes impossible, unreasonable, or unlikely; when
there is a demotion in rank or diminution in pay; or when a clear discrimination,
insensibility or disdain by an employer becomes unbearable to the employee.
The record does not show that Tescon was demoted or unduly discriminated upon by
reason of such transfer. As found by the appellate court, Glaxo properly exercised its
management prerogative in reassigning Tecson to the Butuan City sales area

G.R. No. 187417

CHRISTINE JOY CAPIN-CADIZ, Petitioner,

vs.
BRENT HOSPITAL AND COLLEGES, INC., Respondent.

FACTS:

 Cadiz was the Human Resource Officer of respondent Brent Hospital and
Colleges, Inc. (Brent) at the time of her indefinite suspension from
employment in 2006.
 The cause of suspension was Cadiz's Unprofessionalism and Unethical
Behavior Resulting to Unwed Pregnancy.
 It appears that Cadiz became pregnant out of wedlock, and Brent imposed
the suspension until such time that she marries her boyfriend in accordance
with law.
 Cadiz then filed with the Labor Arbiter (LA) a complaint for Unfair Labor
Practice, Constructive Dismissal, Non-Payment of Wages and Damages with
prayer for Reinstatement.
 LA ruling:
o the LA ruled that Cadiz was not illegally dismissed as there was just
cause for her dismissal, that is, she engaged in premarital sexual
relations with her boyfriend resulting in a pregnancy out of wedlock.
o also by the fact that Brent is an institution of the Episcopal Church in
the Philippines operating both a hospital and college where [Cadiz] was
employed.
 NLRC RULING:
o which affirmed the LA decision in its Resolution.
 CA RULING:
o The CA, however, dismissed her petition outright due to technical
defects in the petition.

ISSUE:

WON Cadiz's premarital relations with her boyfriend and the resulting pregnancy out
of wedlock constitute immorality as a valid ground for the dismissal.

WON The policy was a valid exercise of its management prerogative.

RULING:

NO.
The Court makes reference to the recently promulgated case of Cheryll Santos Leus
v. St. Scholastica’s College Westgrove and/or Sr. Edna Quiambao, OSB.

Leus was dismissed from employment by the school for having borne a child out of
wedlock. The Court ruled in Leus that the determination of whether a conduct is
disgraceful or immoral involves a two-step process: first, a consideration of the
totality of the circumstances surrounding the conduct; and second, an assessment
of the said circumstances vis-a-vis the prevailing norms of conduct, i.e., what the
society generally considers moral and respectable.

Brent's Policy Manual and Employee's Manual of Policies do not define what
constitutes immorality; it simply stated immorality as a ground for disciplinary
action. Instead, Brent erroneously relied on the standard dictionary definition of
fornication as a form of illicit relation and proceeded to conclude that Cadiz's acts fell
under such classification, thus constituting immorality.

Jurisprudence has already set the standard of morality with which an act should be
gauged - it is public and secular, not religious. Whether a conduct is considered
disgraceful or immoral should be made in accordance with the prevailing norms of
conduct, which, as stated in Leus, refer to those conducts which are proscribed
because they are detrimental to conditions upon which depend the existence
and progress of human society.

The fact that a particular act does not conform to the traditional moral views of a
certain sectarian institution is not sufficient reason to qualify such act as immoral
unless it, likewise, does not conform to public and secular standards.

As declared in Leus, "there is no law which penalizes an unmarried mother by

reason of her sexual conduct or proscribes the consensual sexual activity between
two unmarried persons; that neither does such situation contravene[s] any
fundamental state policy enshrined in the Constitution.

The fact that Brent is a sectarian institution does not automatically subject Cadiz to
its religious standard of morality absent an express statement in its manual of
personnel policy and regulations, prescribing such religious standard as gauge as
these regulations create the obligation on both the employee and the employer to
abide by the same.

NO.

Brent must prove two factors necessitating its imposition, viz:

(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.

Brent has not shown the presence of neither of these factors. Perforce, the Court
cannot uphold the validity of said condition.
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:
 On June 11, 2004, One Network Bank, Inc. hired Catherine as an Accounting
Specialist.
 On May 1, 2006, it implemented what it called an "Exogamy Policy," which
stated:
o 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 to continue working for the bank, like 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 ONB.
 LA RULING:
o ruled that Catherine was illegally dismissed. It ordered One Network
Bank to reinstate Catherine and pay her money claims.
 NLRC RULING:
o It ruled that One Network Bank failed to prove the legitimate business
concern in implementing the discriminatory policy against its
employees.
 CA RULING:
 o It found that One Network Bank's policy was a valid exercise of
management prerogative. Hence, there was a just cause in dismissing
Catherine.
o the bank presented a reasonable business necessity in implementing
the assailed company policy. Also known as the bona fide occupational
qualification exception.
o The Court of Appeals directed One Network Bank to pay Catherine
separation pay and nominal damages for its non-compliance of
statutory due process.

ISSUE:

whether or not respondent One Network Bank, Inc.'s prohibition on retaining

employees who marry a co-worker is lawful.

RULING:

NO.

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.

The rule is that unless the employer can prove that the reasonable demands of the
business require a distinction based on marital status and there is no better
available or acceptable policy which would better accomplish the business purpose,
an employer may not discriminate against' an employee based on the identity of the
employee's spouse. This is known as the bona fide occupational qualification
exception.

To justify a bona fide occupational qualification, the employer must prove two
factors:

 that the employment qualification is reasonably related to the essential

operation of the job involved; and,
 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.

The Court finds that respondents 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.

We adopt the National Labor Relations Commission's findings:

 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. Respondent [One Network Bank] failed to specifically demonstrate
and lay bare in what manner and instances would the climate of trust and
 security of its clients would be affected by complainant's marriage to her co-
employee.

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 respondents' assertion that petitioner's marriage to her fellow employee
places the bank's funds at risk for embezzlement.

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.

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.