Star Paper Corp. v. Simbol

Star Paper Corporation, a trader in paper products, adopted a policy in 1995 that barred hiring applicants who had relatives up to the third degree already employed there. The policy also provided that if two single employees decided to marry, "one of them should resign to preserve the policy". Ronaldo Simbol married co-employee Alma Dayrit in 1998 and resigned under the policy. Wilfreda Comia married co-employee Howard Comia in 2000 and also resigned. Lorna Estrella had become pregnant by a married co-worker. By her account, when she returned to work on December 21, 1999, after 21 days' recuperation from an accident, she was stopped at the gate and handed a memorandum dismissing her for immoral conduct. She later submitted a resignation letter in exchange for her 13th month pay. All three signed release agreements. They then filed complaints for unfair labor practice, constructive dismissal, separation pay and attorney's fees, arguing that the policy violated Art. 136 of the Labor Code. The Labor Arbiter dismissed the complaints as a matter of management prerogative, and the NLRC affirmed. The Court of Appeals reversed, declared the dismissals illegal, and ordered reinstatement with full backwages.

1. 1Whether a policy requiring one of two employees who marry each other to resign is a valid exercise of management prerogative or violates the Constitution and the Labor Code.
2. 2Whether Estrella resigned voluntarily.

The policy is invalid. It may not facially violate Art. 136 (now Art. 134), which forbids requiring a woman employee not to marry or dismissing her by reason of marriage. But under the disparate-impact theory, a policy with a disproportionate effect can survive only if it is reasonable. To justify a BFOQ, the employer must prove two things. First, the employment qualification must be reasonably related to the essential operation of the job involved. Second, 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. Locally, the parallel standard is the reasonableness of the policy, and the employer bears the burden of proving a reasonable business necessity. That burden was met in Duncan v. Glaxo but not in PT&T v. NLRC. Star Paper did not explain how the marriages of a sheeting machine operator and a production helper to co-employees would harm its business. The policy was "premised on the mere fear that employees married to each other will be less efficient." The absence of a statute expressly prohibiting marital discrimination did not help the employer. Because the policy was an invalid exercise of management prerogative, whether Simbol and Comia resigned voluntarily became moot. Estrella did not resign voluntarily: it was illogical for her to resign and then sue for illegal dismissal, and the company offered insufficient proof of voluntariness. Her dismissal was therefore illegal. The Court of Appeals' decision was affirmed.