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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE
- Forced leave is a form of flexible work arrangement wherein the employees are required to go on leave for several days or weeks utilizing their leave credits, if there are any. (Part III, paragraph 4, DOLE Department Advisory No. 02, Series of 2009)
Forced leave, floating status or temporary lay-off
An employer may resort to the adoption of forced leave as an alternative work arrangement. In this situation, the employee is “forced” or required to go on leave for several days or even weeks and utilize their leave credits, if any. It is a measure sanctioned by law provided that the company adopts it to prevent outright termination of employees in case of retrenchment, or to prevent serious business losses resulting to its closure.
The law says:
“Forced leave refers to one where the employees are required to go on leave for several days or weeks utilizing their leave credits if there are any.” (Part III, paragraph 4, DOLE Department Advisory No. 02, Series of 2009)
Forced leave, also called floating status or temporary lay-off, must only be a temporary displacement. It must not last more than six (6) months. If the forced leave lasts more than six (6) months, the employees will be deemed terminated. Failure to observe such period is tantamount to a dismissal, for which the employer shall be held liable.
The law says:
“Art. 301. When Employment not Deemed Terminated. The bona-fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty.” (Article 301, Labor Code of the Philippines)
Jurisprudence says:
“The law set six (6) months as the period where the operation of a business or undertaking may be suspended, thereby also suspending the employment of the employees concerned. The resulting temporary lay-off, wherein the employees likewise cease to work, should also not last longer than six (6) months. After the period of six (6) months, the employees should either then be recalled to work or permanently retrenched following the requirements of the law. Failure to comply with this requirement would be tantamount to dismissing the employees, making the employer responsible for such dismissal.
Elsewise stated, an employer may validly put its employees on forced leave or floating status upon bona fide suspension of the operation of its business for a period not exceeding six (6) months. In such a case, there is no termination of the employment of the employees, but only a temporary displacement. When the suspension of the business operations, however, exceeds six (6) months, then the employment of the employees would be deemed terminated, and the employer would be held liable for the same.” (Innodata Knowledge Services, Inc. v. Socorro D’Marie T. Inting, et. al., G.R. No. 211892, December 06, 2017)
Related article: May an employee be placed on floating status?
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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