No spouse employment policy

While the idea of company towns is no longer widespread, some employers continue to seek control over a vast amount of an employee’s life, even outside of work. In certain cases, this extends even to the most personal and intimate of matters, and that is usually where the desire for control intersects with structural biases and prejudices against women. One place we see this most clearly is in the implementation of the so-called No Spouse Employment policy the policy of the employer banning spouses from working in the same company. The Supreme Court has recently had the opportunity to make a clear ruling that any blanket no-spouse employment policy is discriminatory and must be justified under stringent rules in order to be valid.

The Supreme Court first made a ruling on the policy of banning spouses from working in the same company in 2006 (G.R. No. 164774). In that case, several former employees filed a complaint for illegal dismissal due to a policy requiring one of a couple to resign if both are employees of the company and they decided to get married. In that case, the Supreme Court looked at case law from the United States, and incorporated the principle 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 was referred to as the bona fide occupational qualification exception.

This year the Supreme Court revisited the above ruling in the context of another instance of a no-spouse employment policy in a recent case, promulgated last June 22, 2022 (G.R. No. 217414). The no-spouse policy in this case was referred to as an “Exogamy Policy” and stated that when two employees of the bank are married through civil or religious rites, one of them must terminate their employment immediately. However, it seems as if exceptions were granted on a case-to-case basis by the bank because after the petitioner and her spouse married, it is recorded that they requested permission to both continue working for the bank. However, this request was denied, and the petitioner was terminated by the bank.

The petitioner filed a case for illegal dismissal which was granted by the Labor Arbiter and the National Labor Relations Commission. However, the Court of Appeals reversed this decision, claiming that the Exogamy Policy of the bank was a valid exercise of management prerogative and complied with the bona fide occupational policy qualification. It based this interpretation on the fact that a bank’s business is imbued with the highest public interest, and it was necessary to minimize risks from married co-employees.

The Supreme Court, however, reversed the Court of Appeals. The decision, penned by Justice Leonen, began by making clear the general rule in no uncertain terms: an employer’s blanket policy of no-spouse employment is discriminatory. While such a policy may be justified by resort to a bona fide occupational policy qualification, two elements are required for this to apply: (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 this case, a no-spouse qualification is not in any way related to the essential operation of a bank. Second, there is no basis to conclude that employees who marry each other would be unable to perform their duties, much less place a bank’s data or funds at the risk of misuse or embezzlement. Yes, as the Supreme Court noted, couples share secrets – but so do family members, friends, unmarried lovers. There is simply no basis here to say that one married to another employee of the company poses more of a risk than someone with other deeply personal connections. In fact, one could make the argument that spouses who work for the same employer would be less likely to spread any secrets, because their company loyalties are identical.

Furthermore – and as is often the case with these kinds of marital policies – the Exogamy Policy of the bank was applied in a clearly discriminatory and misogynistic fashion. It will be noted that petitioner is a woman, and it was she who was terminated by the bank – no choice was given, nor was there any explanation offered.

The case is another clear example of how attempts at employer overreach have a tendency to devolve into discrimination against the vulnerable and the marginalized. In its decision, the SC rightly referenced the constitutional mandate to full protection of labor alongside the Magna Carta of Women’s commitment to eliminate discrimination against women. In many cases, protecting labor and protecting women go hand-in-hand.

Protecting labor allows for the empowerment of women in the workplace and promotes equality of men and women in labor because it provides a legal basis to recognize the place and importance of women in the workforce and legitimizes women’s concerns. It also puts pressure on compliance with labor standards that addresses inequality concerns in terms of equal pay, leaves and benefits for women workers, among others, and puts a focus on addressing discrimination issues in the workplace.

While employers perform an important role in society and can be a positive part of the lives of their employees, they must always keep in mind that their workers are people first before they are employees. Businesses and employers must be on guard against dehumanizing their employees in pursuit of the bottom line, or in making policies that have a disproportionate impact in practice against the vulnerable. And when employers overstep, the State – consistent with the mandates of the Constitution – must stand ready to make things right.