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[G.R. No. 162994.� September 19, 2005]
DUNCAN ASSOCIATION vs. GLAXO
SECOND DIVISION
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated SEP 19 2005 .
G.R. No. 162994 (Duncan Association Of Detailman-PTGWO and Pedro A. Tecson vs. Glaxo Wellcome Philippines, Inc.)
For resolution is a Motion for Reconsideration dated 8 October 2004, filed by petitioners who seek the reversal of the Court's Resolution 1 dated 17 September 2004 denying the instant Petition for Review.
A brief recapitulation of the facts is in order. Petitioner Pedro Tecson ("Tecson") was employed in 1995 by respondent Glaxo Wellcome Philippines, Inc. ("Glaxo") as a medical representative. He was assigned to market Glaxo's products in the Camarines Sur-Camarines Norte sales area. Upon his employment, Tecson signed an employment contract, wherein he agreed, among others, 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 if management found that such relationship posed a possible conflict of interest, to resign from the company.
Nonetheless, Tecson became romantically involved with Bettsy, an employee of a rival pharmaceutical firm Astra Pharmaceuticals ("Astra"). The two eventually married in September of 1998. The relationship, including the subsequent marriage, was cause for consternation to Glaxo. On January 1999, Tecson's superiors informed him that his marriage to Bettsy had given rise to a conflict of interest. Negotiations ensued, with Tecson adverting to his wife's possible resignation from Astra, and Glaxo making it known that they preferred to retain his services owing to his good performance. Yet no resolution came to pass. In September 1999, Tecson applied for a transfer to Glaxo's milk division, but his application was denied in view of Glaxo's "least-movement-possible" policy. Then 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.
The matter was then brought to the Glaxo Grievance Committee, and subsequently to a voluntary arbitrator. On 15 November 2000, 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. This Decision was assailed by petitioners before the Court of Appeals and this Court, but for naught.
The present Motion for Reconsideration advances four main arguments: that the Court erroneously relied on a conjectural presumption that Tecson's relationship might compromise the interest of the company or allow a competitor to gain access to Glaxo's secrets and procedures; that Glaxo's policy regarding the marriage of its employees to employees of rival companies is contrary to public policy, morals and good customs; that Glaxo violated its own policy which authorized the transfer of the subject employee to another department when it denied Tecson's application to transfer to the milk division; and that Tecson was constructively dismissed when he was transferred to the Butuan City-Surigao City-Agusan del Sur sales area.
One of the central anchors of the assailed Resolution was the holding that Glaxo's policy on marriage did not violate the equal protection clause of the Constitution,2 as the constitutional guarantee does not encompass discriminatory behavior engaged by private individuals.3 Petitioners do not challenge this holding of the Court, and we see no reason to revisit this issue.
But before we engage in a renewed discussion on the validity of Glaxo's policy itself, we should examine the claim that Tecson was constructively dismissed. After all, assuming that the policy itself were declared invalid, a finding nonetheless that Tecson was not constructively dismissed would still render this petition futile. The Court has ruled Tecson was not actually dismissed, and the Motion for Reconsideration adduces no substantial reasons why this holding should be reversed.
The Resolution cited Abbott Laboratories (Phils.), Inc. v. NLRC 4 wherein the Court upheld the prerogative of a drug company to reassign a medical representative under its employ to a new territory. In the same vein, the Court has consistently affirmed as a valid prerogative of the employer the reasonable reassignment or transfer of an employee. As held in Philippine Japan Active Carbon Corp. v. NLRC:5
It is the employer's prerogative, based on its assessment and perception of its employees' qualifications, aptitudes, and competence, to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. An employee's right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal.6
In Philippine Telegraph and Telephone Corp. v. Laplana,7 the Court again upheld the prerogative of management to reassign an employee to a different locality, despite the "personal inconvenience or hardship that will be caused to the employee by reason of the transfer."
Tecson was not relieved of his employment with Glaxo. Neither was he transferred to a different position of lower rank or remuneration. The alleged constructive dismissal pertained to his transfer to Butuan from Naga City, a reassignment that would fall within the ambit of management's prerogative to transfer employees.
Petitioners, in their Motion for Reconsideration, purport that constructive dismissal was proved by the allegation that Tecson's commissions for January and February were withheld from him, and that he was forced to surrender his sales paraphernalia. Yet the veracity of these factual allegations were not acknowledged by either the voluntary arbitrator or the Court of Appeals. This Court, which is not a trier of facts, could not very well at this late stage reverse the established factual conclusions on the basis of mere allegations which have not been previously substantiated but which in fact have been consistently rebutted by the respondents.8
In case of a constructive dismissal, the employer has the burden of proving that the transfer and demotion of an employee are for valid and legitimate grounds, i.e., that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits.9 In this case, Glaxo did not opt to terminate or demote Tecson, but transferred him to a sales region that included the respective home provinces of himself and his wife, and offered monetary assistance to shoulder his family's relocation.10. Certainly, the choice of location was not selected with petty malice aforethought, but even designed for the easier palatability of the employee.
The fact that the employee may be displaced from established roots by reason of the transfer is not sufficient to deny the valid management prerogative to transfer its employees. Tecson himself had acknowledged this prerogative when he signed the contract of employment which expressly agreed "to be assigned any work or work station for such periods as may be determined by the company and whenever the operations require such assignment."
This finding that Tecson was not actually dismissed is determinative of this case, especially considering that his transfer by Glaxo from Naga to Butuan would have been a valid exercise of an employer's prerogative, whether or not the company policy on marriage subsists. Nonetheless, it would be specious to assume that Tecson's transfer had nothing to do with his marriage to an employee from a rival drug company. Moreover, questions on the validity, if not appropriateness of Glaxo's policy itself, has attracted comment on the various triers of this case, as well as the public at large.
May an employer impose conditions, restrictions or consequences on an employee by reason of the latter's choice to marry or choice of spouse? The answer would really all depend on the particular circumstances in each case.
The governing legal framework should be established. Under Article 136 of the Labor Code, it is illegal for an employer to prohibit a female employee from getting married or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage. This provision addresses a concern, particularly gender discrimination, with no direct relevance to this case. Nonetheless, it can be invoked by a female employee who finds herself prohibited by her employer from contracting marriage, or otherwise dismissed or discriminated upon by reason of her marriage, and the employer faces the unenviable burden of establishing the inapplicability of Article 136.11
Of more general application is Article 282 of the Labor Code, which governs the termination by employers for "just causes." Had Tecson been actually terminated in this case, Article 282 would have necessarily found application, since Articles 282 to 284 stand as the only basis in law for the valid termination of an employee by an employer.12
Under Article 282, the employer may dismiss the employee for any of the following causes: (a) serious misconduct or willful disobedience by the employee of the lawful order of his employer or representative in connection with his work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) commission of a crime or offense against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) other causes analogous to the foregoing. Assuming that there is a company policy allowing the dismissal, constructive13 or otherwise, of an employee by reason of the employee's marriage or choice of spouse, such policy alone cannot justify the dismissal. The employer will have to establish not only the existence of the policy, but the presence of any of the grounds enumerated in Article 282. Our Constitution and Labor Code guarantee an employee's security of tenure. For regular employees as defined under the Labor Code, security of tenure is assured by the prohibition against termination except for the causes enumerated under Articles 282 to 284.
Thus, the validity of a company policy on marriage such as that maintained by Glaxo would not necessarily be determinative of the question of whether an employee who violated such policy may be terminated. Still, there may be instances wherein the validity of the policy, whether standing by itself or as incorporated into an employment contract, would be the decisive factor. Such may arise if for example, the employee is sought to be dismissed on the ground of loss of confidence,14 and such loss of confidence developed due to the marriage to an employee from a rival company. In such cases wherein it is necessary to pass judgment on the employer's policy itself, the following points should be considered.
Both the Constitution and our body of statutory laws accord special status and protection to the contract of marriage. Our Constitution recognizes that "marriage, as an inviolable social institution, is the foundation of the family, and shall be protected by the State,"15 and our Family Code acknowledges that marriage is "a special contract of permanent union ... an inviolable social institution whose nature, consequences and incidents are governed by law."16 It may be debatable whether these provisions, by themselves, may be the source of operative and executory rights, but at the very least, they establish a pervasive public policy that frowns upon acts that encumber any person's freedom to marry.
Moreover, if such encumbrance is contained in an employment contract, the stipulation can be declared void under Article 1409(1) of the Civil Code, which provides that a contract whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy is inexistent and void from the beginning.17 The standard is of great utility, as it allows a measure of relief for persons laboring under private contractual obligations that, while insusceptible to the traditional constitutional challenge under the Bill of Rights, nonetheless stand as onerous to the obligor and noxious to our general body of laws.
Still, it would be injudicious, if not irresponsible, to judicially enforce a universal position that disencumbers marriage from adverse consequences, if the encumbrance stands to protect third persons inevitably affected by an act of marital union. For much as we may want to see and regard marriage in a vestal state, it may be a source of negativity for third persons, and not just the jilted. This is apparent even on the most visceral level, as anybody who dislikes an immediate family member's choice of bride or groom can attest to. The statutory protections accorded to marriage do not translate to a legal compulsion on people to favor another person's choice in spouse.
The thesis is harmless enough if the consequence of such disapproval extends merely into the personal sphere and not the legal. Yet, such as in this case, the consequences may be economic as well. For example, an aunt who voluntarily extends regular financial benefits to a nephew may refuse to continue the doleout by reason of the relative's marriage or choice of wife. In such a case, the nephew would have no cause of action to compel his aunt to continue the remuneration, even if the aunt's reasons for disliking the new wife are noxious, such as bigotry. The invocation of the inviolability of marriage or its protection under law will not suffice to legally compel the aunt to extend her largesse to her nephew, for this act of charity arises solely from private volition. The State may protect marriage, but it cannot compel private persons to give away money out of their pockets to the bride and groom.
If the prohibitions or restrictions are contained in a private employment policy or contract, the norms that would govern their review are such as those contained in the Labor Code, and to an extent, the "public policy" clauses of the Civil Code.18 However, the sanctity of the marital vow should not be the only relevant consideration at hand. The considerations which may have impelled the employer to impose such conditions on the employee's absolute right to marry warrant examination as well.
We can surmise that if the restrictions or conditions on the employee's right to marry bear no relevance to any interests that the employer should be concerned with, then they should be voided if they are of obligatory import. In that regard, it is difficult to foresee an instance wherein an absolute prohibition on any marriage imposed on the employees may be sanctioned.19 Even if the prohibition is premised on the belief that a married employee would be able to devote less time to the job, whatever causal economic concerns hardly outweigh the right of an individual to get married. Employees this day and age have long transcended the yoke of serfdom and absolute fealty to master and the expense of the marital bind.
If the prohibition or restriction pertains to the choice of spouse, rather than the choice to marry at all, there should be an examination of the rationale behind the constraint. Again, if the restrictions or conditions bear no relevance to any interests that the employer should be concerned with, then they should not be upheld. Restrictions that are nothing more than the enforcement of personal biases, such as prohibitions on marrying members of a particular race or ethnic group, may be struck down.
Nonetheless, while generalities may be sufficient to strike down the most obnoxious of prohibitions, those restrictions that are geared towards maintaining valid economic concerns of the employer have to be assessed on a case to case basis. Our fundamental law respects the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to expansion and growth.20
If the rationale in question relates to a consideration so vital to the interests of the employer as to warrant legal protection, it should then be determined whether the means employed by the employer are reasonable enough as to allow a measure of balance between these key interests of the employer and the fundamental right of the employee to marry.
Let us pay particular attention to Glaxo's policy. As noted in the Resolution, Glaxo belongs to the highly competitive pharmaceutical industry. The competitive nature of the business is further highlighted by the fact that pharmaceutical drugs are indispensable to modern society, and that the rival companies tend to produce drugs of like effect but marketed under respective brand names. Thus, within the pharmaceutical industry, the hazard of industrial espionage looms largely, more so than most other competitive industries. To that end, Glaxo is entitled to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors, concomitant to its right to protect its own economic interests.
This in mind, it is but reasonable for Glaxo to be cautious about the social interaction of its employees with those of companies which it directly competes with. If the employee goes as far as sharing hearth and home with the employee of the rival company, there is greater cause of concern on the part of Glaxo. The fear may not so much arise from the possibility of willful betrayal by its employees of trade secrets, but from the myriad opportunities in the course of shared lives that one may inadvertently divulge to the spouse confidential information that the rival drug company may benefit from. After all, the employer has no control over pillow talk. Neither could it be expected that the employee maintain a higher fidelity to the employer than to the spouse.
It may be so, as petitioners argue, much of the fear is hypothetical in nature. Yet Glaxo, as with any other industry, is allowed to take reasonable steps in order to prevent potential damage from becoming actual, especially if the economic consequences are substantial. Glaxo is hardly a small-scale industry, and the pharmaceutical business seldom characterized by old-fashioned rectitude.
Still, these concerns aside, the steps that Glaxo may employ to avoid the undue divulgence of its trade secrets should be within reason. If termination is to be considered as an option, it should be only as a final resort, if there is no other way to avoid the conflict of interest.
In this case, Glaxo's assailed policy does not call for automatic termination, providing as it does a process that allows for all the opportunities for a mutually agreeable solution. Per the Employee Handbook, "every effort shall be made, together by management and the employee, to arrive at a solution within six (6) months, either by transfer to another department in a non-counter checking position, or by career preparation toward outside employment after Glaxo Wellcome. Employees must be prepared for possible resignation within six (6) months, if no other solution is feasible."21
This procedure is extremely reasonable under the circumstances, and we have no problems in upholding its validity. As noted in the Resolution: "[i]n any event, from the wordings of the contractual provision and the policy in its employee handbook, it is clear that Glaxo does not impose an absolute prohibition against relationships between its employees and those of competitor companies. Its employees are free to cultivate relationships with and marry persons of their own choosing."22 It recognizes the concern arising from the possible conflict of interest, yet dissuades the enforcement of a hasty, unilateral solution. It appears from the record of this case that such a procedure was adopted in good faith by both parties. Tecson may find fault with the fact that Glaxo refused his request for transfer to the milk division, a step which, if resorted to, may have resolved the perceived conflict of interest. Yet the procedure involved allows the transfer only if mutually agreed upon, and besides, employees cannot generally compel the employer to transfer them from one division to another, this being a management prerogative.
And finally, if no mutual resolution is arrived at, termination and voluntary resignation remain as viable options. Neither obtained in this case, and we have already ruled that the transfer was valid and did not constitute constructive dismissal. If Glaxo, or any employer with a similarly drawn-out procedure, were to ultimately resort to termination, the burden would still fall upon it to establish that such termination is in accordance with the just causes as provided in Article 282 of the Labor Code. Without such linkage, the termination would be invalid.
The fact that there was no actual termination in this case obviates the need for us to further apply Article 282 or the jurisprudential rules on illegal termination to this case.
Still, should Glaxo retain the said policy, and another employee trek the same trail as Tecson did, it cannot be foreordained that the Court would similarly rule for Glaxo and against the said employee. As repeatedly emphasized, it all depends on the particular circumstances of each case. And ultimately, if dismissal, constructive or otherwise, is resorted to, the standards for termination set by the Labor Code must still be complied with.
WHEREFORE, petitioner's Motion for Reconsideration is DENIED WITH FINALITY.
Very truly yours,
(Sgd.) LUDICHI YASAY-NUNAG
Clerk of Court
Endnotes:
1 G.R. No. 162994, 17 September 2004, 438 SCRA 343.
2 See Section 1, Article III, Constitution.
3 "The challenged company policy does not violate the equal protection clause of the Constitution as petitioners erroneously suggest. It is a settled principle that the commands of the equal protection clause are addressed only to the state or those acting under color of its authority. Corollarily, it has been held in a long array of U.S. Supreme Court decisions that the equal protection clause erects no shield against merely private conduct, however discriminatory or wrongful. The only exception occurs when the state in any of its manifestations or actions has been found to have become entwined or involved in the wrongful private conduct. Obviously, however, the exception is not present in this case. Significantly, the company actually enforced the policy after repeated requests to the employee to comply with the policy. Indeed, the application of the policy was made in an impartial and even-handed manner, with due regard for the lot of the employee." Duncan Association v. Glaxo, supra note 1 at 354-355.
4 G.R. No. L-76959, 12 October 1987, 154 SCRA 713.
5 G.R. No. 83239, 8 March 1989, 171 SCRA 164.
6 Ibid.
7 G.R. No. 76645, 23 July 1991, 199 SCRA 485.
8 See Rollo, pp. 76-77.
9 Castillo v. NLRC, 367 Phil. 605 (1999).
10 Rollo, p. 210.
11 We have held that a company policy prohibiting female employees from contracting marriage during their employment is void for violating Article 136 of the Labor Code. See PT&T v. NLRC, 338 Phil. 1093 (1997). However, the American case of Emory v. Georgia Hospital Service Association, previously cited in our Decision, is also worth noting. Therein, a female employee was discharged by her employer, a health insurance firm, for having married a salesman from a rival insurance company. The discharged employee brought suit under the Civil Rights Act of 1964, alleging unlawful discrimination against her because of her sex. However, the Georgia District Court ruled that plaintiff was validly terminated, as her termination was occasioned not by reason of her sex, but by her violation of company policy prohibiting marriage to employees of directly competing insurance businesses. Emory v. Georgia Hospital Service Association (1971), DC Ga., 4 CCH EPD 7785, 4 BNA FEP Cas 891, affd (CA5) 446 F2d 897, 4 CCH EPD 7786; Cited 45 Am Jur 2d Sec. 469.
12 In this case, Articles 283 (governing dismissals for authorized causes), and 284 (on dismissals on the ground of disease) would not have found application.
13 "In constructive dismissal, the employer has the burden of proving that the transfer and demotion of an employee are for just and valid grounds such as genuine business necessity. The employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee. It must not involve a demotion in rank or a diminution of salary and other benefits. If the employer cannot overcome this burden of proof, the employee's demotion shall be tantamount to unlawful constructive dismissal." Globe Telecom v. Florendo-Flores, 438 Phil. 756 (2002).
14 "Loss of confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. He must be invested with confidence on delicate matters such as the custody, handling, care and protection of the employer's property and/or funds. But in order to constitute a just cause for dismissal, the act complained of must be "work-related" such as would show the employee concerned to be unfit to continue working for the employer." Gonzales v. NLRC, G.R. No. 131653, 26 March 2001, 355 SCRA 195.
15 Section 2, Article XV, constitution.
16 Article 1, family code.
17 See Article 1409 (1), Civil Code. See also Article 1352, Civil Code, which states that "[C]ontracts without cause, or with unlawful cause, produce no effect whatever. The cause is unlawful if it is contrary to law, morals, good customs, public order or public policy." Yet, while the principle is of long-standing recognition, it is also of purposeful ambiguity. "Public policy" is a vague expression, and few cases can arise in which its application may not be disputed. Noble v. City of Palo Alto, 89 Cal. App. 47, 50-51 (1928). A court's power to void a contract as being in contravention of public policy has been described as delicate and undefined, see Jeffrey Lake Development, Inc. v. Central Nebraska Public Power and Irrigation Dist., 262 Neb. 515, 633 N.W. 2d 102 (2001); In re Kaufman, 201 OK 88, 37 P.3d 845 (Okla. 2001), and is thus exercised sparingly. First Nat. Bank of Springfield v. Malpractice Research, Inc., 179 III. 2d 353, 228 III. Dec. 202, 688 N.E. 2d 1179, 70 A.L.R. 5th 759. The concepts of "morals", "good customs", and "public order" are no less susceptible to easy definition.
18 Properly speaking, Articles 1306, 1352 and 1409 (1) pertain to contracts. These provisions can operate to nullify clauses contained in employment contracts. We are aware though that in many establishments, employees are not required to sign formal contracts, but are otherwise enjoined to observe company policies. The absence of a formal contract would not preclude the application of the Civil Code in preventing the enforcement of obligations that are contrary to law, good customs or public policy. Article 1183 of the Civil Code mandates the annulment of conditions to an obligation that are contrary to good customs, public policy, or otherwise prohibited by law. Moreover, Article 6 prohibits the waiver of rights if such waiver is contrary to law, public order, public policy, morals or good customs. Such rights would include the right to marry or the choice of whom to marry.
19 The grey area may exist in instances wherein the employer is a religious order which, in accordance with its tenets, demands a vow of celibacy. In such a case, the freedom of exercise of religion would be accorded its due respect, depending on its appropriate applicability in the particular case.
20 See Section 3, Article XIII, constitution.
21 See Duncan Association v. Glaxo, supra note 1 at 352.
22 Id. at 355.
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