Case Summary (G.R. No. 164774)
Petitioners
Star Paper Corporation, Josephine Ongsitco, Sebastian Chua
Respondents
Ronaldo D. Simbol, Wilfreda N. Comia, Lorna E. Estrella
Key Dates
• Simbol hired October 27, 1993; married June 27, 1998; resigned June 20, 1998
• Comia hired February 5, 1997; married June 1, 2000; resigned June 30, 2000
• Estrella hired July 29, 1994; resigned December 21, 1999 after alleged dismissal
• Company policy promulgated in 1995
• Labor Arbiter decision May 31, 2001; NLRC resolution January 11, 2002 and August 8, 2002; Court of Appeals decision August 3, 2004; Supreme Court decision April 12, 2006
Applicable Law
• 1987 Constitution: Article II, Section 18 (labor as primary social force); Article XIII, Section 3 (protection of workers, security of tenure)
• Civil Code Articles 1700, 1702 (labor relations public interest, favor laborer)
• Labor Code Article 136 (prohibits conditioning employment on marital status or requiring resignation upon marriage)
• Doctrine of management prerogative subject to reasonableness and bona fide occupational qualifications
Facts
In 1995 Star Paper adopted an anti-nepotism policy barring hiring or continued employment of relatives up to the third degree, including spouses. When Simbol and Dayrit, both employees, married in 1998, Star Paper informed them that one must resign; Simbol resigned. The same policy prompted Comia’s resignation in 2000 after her marriage to a co-worker. Estrella, allegedly dismissed for “immoral conduct” following her pregnancy by a married co-worker, was denied entry after medical leave and compelled to sign a resignation letter in exchange for benefits.
Procedural History
Respondents filed unfair labor practice and constructive dismissal complaints. The Labor Arbiter dismissed for lack of merit, NLRC affirmed. The Court of Appeals reversed, declared the dismissals illegal, ordered reinstatement with backwages and attorney’s fees. Petitioners sought review before the Supreme Court.
Issue
Does a company policy banning spouses or close relatives from working together violate the 1987 Constitution and Labor Code Article 136, or is it a valid exercise of management prerogative? Were the respondents’ resignations voluntary?
Ruling
The Supreme Court affirmed the Court of Appeals: the anti-nepotism policy is an invalid exercise of management prerogative; respondents’ resignations need not be examined as the policy itself is illegal; Estrella’s resignation was involuntary, and her dismissal was unlawful.
Reasoning
- Constitutional and statutory provisions reflect a public policy favoring labor and security of tenure; Article 136 expressly prohibits discrimination or dismissal merely because of marriage.
- Management prerogative to set employment rules must be reasonable and supported by a bona fide occupational qualification (BFOQ) or business necessity.
- Precedents (Glaxo Wellcome v. Duncan; PT&T) require clear proof of reasonable necessi
Case Syllabus (G.R. No. 164774)
Facts of the Case
- Star Paper Corporation is engaged principally in the trading of paper products; Josephine Ongsitco serves as Manager of the Personnel and Administration Department, and Sebastian Chua as Managing Director.
- In 1995, the company promulgated a policy barring relatives up to the third degree, including spouses, from working concurrently; co-employees who marry must choose which one resigns.
- Ronaldo D. Simbol, employed since October 27, 1993, married fellow employee Alma Dayrit on June 27, 1998; he resigned on June 20, 1998 pursuant to the policy.
- Wilfreda N. Comia, employed since February 5, 1997, married co-worker Howard Comia on June 1, 2000; she resigned on June 30, 2000 following management’s reminder of the rule.
- Lorna E. Estrella, employed since July 29, 1994, became pregnant by co-worker Luisito ZuAiga; though subject to dismissal for “immoral conduct,” she opted to resign on December 21, 1999 and signed a Release and Confirmation Agreement in exchange for her thirteenth-month pay.
Procedural History
- Respondents filed complaints for unfair labor practice, constructive dismissal, separation pay, and attorney’s fees before the Labor Arbiter.
- On May 31, 2001, Labor Arbiter Melquiades Sol del Rosario dismissed the complaint for lack of merit, citing broad management prerogative over employment regulations.
- The NLRC affirmed the Arbiter’s decision on January 11, 2002, and denied respondents’ motion for reconsideration on August 8, 2002.
- The Court of Appeals, in CA-G.R. SP No. 73477, reversed on August 3, 2004, declaring the dismissals illegal and ordering reinstatement with backwages and attorney’s fees.
- Petitioners filed a Petition for Review on Certiorari before the Supreme Court.
Issues
- Whether the company’s policy banning spouses (and other relatives up to the third degree) from concurrent employment violates:
• The employees’ constitutional rights to marriage and family life, labor protection, and security of tenure, and
• Article 136 of the Labor Code prohibiting marriage-based discrimination. - Whether respondents’ resignations were voluntary or amounted to constructive dismissal.
Company’s Anti-Nepotism Policy
- Prohibits hiring new applicants who have a rel