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 Resolution1 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. NLRC4 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