No, that may not be totally correct.
According to the IRS, "You can’t claim a married person who files a joint return as a dependent unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid."
Basically, that would mean that, if your combined incomes were less than $20,700 you could still file jointly. If you file a joint tax return with your spouse, it's possible that your spouse to be claimed as a dependent on your father-in-laws return, but only if your income for the year was too low for you to owe any taxes. That means "getting all your withholding back."
For example, if your wife worked for part of the year and had taxes withheld from her paycheck, you and her could file a joint tax return in order to claim a refund of all the money that was withheld. If any of the withholding is kept by the IRS, however, she can’t be claimed as a dependent OR you can't file jointly.