Published — June 1, 2022
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
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.
For more information about other employment status read: Knowing the Difference Between Probationary Employment and Project Employment
What is “Floating Status”?
- Floating Status is synonymous to temporary retrenchment of business or undertaking thereby inevitably forcing or causing its affected employees to go on leave.
- It is sometimes called as “Temporary Off – detail” or “off-detailing” and is a valid exercise of management prerogative.
What is the legal basis of “Floating Status”?
o The legal basis for “Floating Status” is Article 301 of the Labor Code which states the following:
“The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment (sic) by the employee of a military or civic duty shall not terminate employment. In such all 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.”
When “Floating Status” is not equivalent to dismissal
o “Off-detailing” or putting an employee on floating status is not equivalent to dismissal, for as long as it does not last for more than six (6) months. After six months, the employee should be recalled for work without loss of seniority rights, or for a new assignment; otherwise, he is deemed terminated.
When “Floating Status” is equivalent to constructive dismissal; thus, becomes unlawful
o In the case of Airborne Maintenance vs. Egos (G.R. No. 222748, April 03, 2019), to wit:
“Here, the totality of the foregoing circumstances shows that petitioner’s acts of not informing respondent and the DOLE of the suspension of its operations, failing to prove the bona fide suspension of its business or undertaking, ignoring respondent’s follow-ups on a new assignment, and belated sending of letters/notices which were returned to it, were done to make it appear as if respondent had not been dismissed. These acts, however, clearly amounted to a dismissal, for which petitioner is liable.” (emphasis ours)
o Also, in the case of Morales vs. Harbour Centre Port Terminal (G.R. No. 174208, January 25, 2012), to wit:
“Constructive dismissal exists where there is cessation of work because “continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay” and other benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment.”
Who has the burden of proof?
o In the case of Lopez vs. Irvine Construction Corporation (G.R. No. 207253, August 20, 2014), to wit:
“The paramount consideration should be the dire exigency of the business of the employer that compels it to put some of its employees temporarily out of work. This means that the employer should be able to prove that it is faced with a clear and compelling economic reason which reasonably forces it to temporarily shut down its business operations or a particular undertaking, incidentally resulting to the temporary lay-off of its employees.
Due to the grim economic consequences to the employee, case law states that the employer should also bear the burden of proving that there are no posts available to which the employee temporarily out of work can be assigned.” (emphasis ours)
Good day,
I just want to know if the employee who were placed under off detail status can look for another employement.?
Yes. But you need to inform your employer that in the meantime you are looking for employment elsewhere because you need to provide for yourself/your family. You need to inform them (your previous employer) whether or not you intend to go back to them once they are able to give you work/project.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Good afternoon!
I am currently employed as a supervisor in a call center and even before the ECQ started, I have been hearing that our account might be pulled out by June. I am a regular employee and was assured by our Manager that I will be one of the last persons to be removed from the account.
When the ECQ started, I decided to stay at home for safety reasons, I was then advised that I can work from home and my computer was delivered to my place. I was not able to start working from home right away because according to them, configuration needs to be done. To my surprise, I was advised after a couple of days that they need to remove some agents and supervisors, the account is still ongoing but since I can not work from the office, they need to remove me from the program. They pulled out the computer and t no more advise from them. After one week, they communicated with me again and said they will put me back to the program if I can go to work. Again, I thought of my safety and safety of my family so I had to stick with my initial decision to stay at home. Since, they need a supervisor again, they sent me back my computer. I worked for more than one week and then was asked to go on forced vacation leave for almost a week, after my vacation leave, I was not able to log in again and according to them, a ticket was placed to IT to fix my issues. Three days past and I received a text message that they are removing people from the program again and since it’s taking a while to fix my logins, they are removing me again from the program.
Please help me analyze and would appreciate your advise, I was removed from the program twice without any formal notification. I am not sure how to forward with this and would appreciate if you can help me.
Thank you!
Hello. Are you a regular employee of the company or an independent contractor? This is because if you are an independent contractor, your services may be terminated based on the grounds of your contract. If you are a regular employee employee of the company, your services may be terminated based on just (Article 297) and authorized causes (Article 298) of the Labor Code. On the assumption that you are a regular employee of the company, removal from your position without complying with the due process set by law (Notice to Explain ?& Notice of Decision / Notice of Termination for Redundancy/Retrenchment) is illegal. Ask them that you be given work. If not, you can file a case for illegal dismissal at DOLE.
Isn’t the 6 konths “floating” period reduced to 3 months? (See section 12 of DOLE Department Order 174, series of 2017).
The 3 month “floating” period mentioned in Department Order 174 is applicable only to those who were hired by contractors. If the Principal’s contract with a client expired, the employee who was deployed in that client may wait for 3 months. The Principal (his employer) has to find another client where he will be assigned. Failing such, the Principal (his employer) has to pay him separation pay.
The law is clear that for other cases, floating status must not exceed 6 months and there must be temporary closure or suspension of business operations to justify placing the employee on a floating status.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Hi,
Just to ask also Ma’am because it is clear that for a floating status to be valid, there must be a temporary suspension of operations.
How about, if there is no suspension of operations but this time of COVID the business only requires very minimal number of workforce, can we possibly float some employees this time or is it valid or legal to float some employees even without suspension of operations and the business may give them job when the operation is normalized ? Still of course the business has to follow the not more than 6 months floating status.
To place an employee under floating status, there must be suspension of business operations. If there is no suspension of business operation, no stoppage of a certain undertaking/project, then there’s no ground for a floating status. Now, if you think that the business will continue to operate, then you may explore alternative working arrangements such as reduction of working hours, alternate/shifting schedule for your employees. For example, group 1 will work on MWF, Grp 2 will work TThS.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Hi! I am a BPO employee. Our account closed on April 30, 2020. Prior to closing, we were made to sign a new contract on March 30 indicating that we will be moved to floating status with pay for one month and it will end on April 29. Within the one month span, they told us that they will look for other accounts for us to transfer. Before April 29, 2020, we had a meeting and told us that they were not able to find other accounts for us to transfer and told us that they will extend the floating status to 5 more months but it is no longer with pay. I haven’t signed the new contract yet since i am having doubts. My question is since our company is still operating. Is the 5 months floating without pay extension lawful? Thank you very much for the answer.
Hello. The five month extension may be considered as lawful. The employer may place you under floating status not only if there is suspension of business operations, but also if an undertaking is suspended, which in your case is a new account (or failure to look for new account). The employer is allowed to temporarily suspend work due to bona fide suspension of business operations or undertaking for a period not exceeding six (6) months. This is provided for the Labor Code, as follows:
ART. 300 [286]. 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 of 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.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Hi I am a supervisor of a BPO company. I voluntarily offered to go to work due to the free accommodation that was offered by the company however I was told not to come to work since they don’t need additional supervisor to go to work for the account that I’m handling. I was advised to wait for an approval to be transferred to a different client/account but until today I’m still waiting for the approval and it has been a month now. I was placed on No Work No Pay.
You need to write a letter asking your company for the status as regards your work. Otherwise, not giving you any clients may be taken as an act of illegal dismissal.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Is it right for a company to extend or put the float status on hold during the ECQ given that the 6months float period will he completed by 1st week of May 2020?
Yes, the company may extend the floating status especially if the company has closed its operations during the ECQ. It may not be considered in the computation of the 6 month period.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Hi there, the company did not close down it’s operation. It’s unfortunate that there was no account in need of the role to be transferred to. Is it still lawful to have the float period be put on hold due to the ECQ situation given that they should reinstate the employee or be paid accordingly? Thank you
You need to talk to the management to address this issue. If there’s no account to be transferred to, then the floating may be illegal. Your situation falls under redundancy – the position is in excess of what the business requires. Redundancy is one of the authorized causes for termination. HOWEVER, if you fall under an independent contractor, then redundancy under the Labor Code does not apply to you and the contract may be terminated accordingly.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Hi may I know the legal basis of the right of the employer to extend or put on hold the floating status during ECQ? This is for research purposes, thank you.
The employer is allowed to temporarily suspend work due to bona fide suspension of business operations or undertaking for a period not exceeding six (6) months. This is provided for the Labor Code, as follows:
ART. 300 [286]. 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 of 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.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Hi,
My employer also selected me to be in floating status due to ECQ. However, only a verbal communication was done and no formal email sent until 2 weeks after. Is that alright and legal?
Thank you so much for your response.
Yes, the technicalities may be brushed aside in the meantime considering that we are in ECQ. What is important is that the floating status must not exceed 180 days, otherwise it would be a case of constructive dismissal. The fact that a formal email was sent two weeks after does not automatically make the “floating status” illegal per se.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Hi,
Looking for legal advice.
Can a company put their selected employees in a floating status after ecq and once they resume the operations? Is it lawful? Is cost cutting a valid reason?
Thanks
Yes, an employee may be placed on floating status during ecq and even afterwards. However, the following parameters must be met:
1. The floating status must not exceed 6 months.
2. Placing an employee on “floating status” presupposes, among others, that there is less work than there are employees;
3. Must be done in good faith and not to harass an employee.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Hi good day oir company sent us an email that we are on floating, and no definite time to resume even after ecq lifted, what would the necessary action we can take, we cannot afford to loose our job.
We understand that this is truly an unfortunate situation, both on the employer and the employee. The employee could not force the employer to maintain him if the business is suffering financial losses due to the pandemic. This falls under company prerogative already. However, in order for the floating status to be valid, there must be suspension of business operations, and the floating status must not last for more than 6 months.
Hi,
is it legal to put only 2 employees on a floating status even after ECQ? what would be the criteria in selecting the employees who will work and who will be on a floating status? thank you!
also, is it legal to put a regular employee on a floating status even if the business is still operational?
The ground for putting employees on a floating status is the suspension of business operations /undertaking due to ECQ. The employer is allowed to temporarily suspend work due to bona fide suspension of business operations or undertaking for a period not exceeding six (6) months. This is provided for in the Labor Code, as follows:
ART. 300 [286]. 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 of 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.
Hence, for example, if the employees are assigned on a specific project/undertaking and that undertaking was cancelled because of the ECQ/Covid 19 pandemic, then all employees assigned to it may be placed under floating status. There is no criteria; supposedly all employees in that specific project may be placed in floating status not exceeding 6 months. If the employer placed only some on floating status, please ask your employer what is his/her basis in doing so.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
hi just want to ask, if a employee was put on floating status for 6 months does this employee get paid or not. Thanks
An employee who was placed on floating status for 6 months will not receive any salary. However, after 6 months, if he is not reinstated, he is considered to have been placed under constructive (illegal) dismissal. The employee may complain with DOLE.
Hi, what if after 6 months, employer can’t able to reinstate the employee for the reason that employer’s business still isn’t in a good condition because of financial crisis. Does employee still considered to have been placed under constructive dismissal?
After 6 months, the employer has to terminate the services of the employee if it still could not provide work. In that case, the employee will be terminated on the ground of retrenchment due to serious business losses. The employee will receive separation pay equivalent to one-half (1/2) month pay for every year of service. However, if the employee was still placed on floating status even AFTER 6 months, then that is considered as constructive dismissal and the employee may file a case for illegal dismissal (constructive dismissal) against the employer.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
If employee is placed on floating status and will not receive any salary, does it follow as well for company benefits (HMO, leaves, etc.)? Same with any government benefits (ML, PL, solo parent, MAGNA CARTA, etc.)?
Hello. The answer to your two questions are both “yes,” simply because there would be no basis for the computation of the benefit since you are not receiving salary in view of the floating status.
Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Would an employee who is on floating status be eligible for holiday pay?
Hi Mr. De La Paz. Unfortunately, an employee who is placed on floating status has no salary during that period. Consequently, he is not eligible for holiday pay.
Thanks for this article.I’d also wanna ask if while on floating status, am I still entitled for government benefits like sss, philhealth and pag-ibig contributions? My company implements “no work, no pay”. However I also know there’s an employer counterpart on benefits, right?