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My sister is teaching at school X and she applied for a job in school Y. She was given a written test, and after being selected she was given an Interview also.

However, due to disciplinary code between school's association both school belong she didn't get the new job. School Y said, "Would have selected you but can't because it may cause trouble with school X".

Now she will go back to school X and is getting worried about handling this situation with the school's principal. She is presuming the principal knows because some other colleagues knows about this.

How can she politely and professionally handle being prompted about this situation by the school's principal or staff?

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There isn't much that can be done. Just go in and act normally. If taken to task over it, just tell the truth without going into details.

Your sibling can apply for as many jobs as she wants, it's none of the principals business so long as she's not doing it on work time.

It's unprofessional of the other school to mention anything to the principal, and quite possibly the principal will not mention it at all. So there is no need to bring it up at all unless asked directly.

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