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)
Kung nakafloating status po ba may karapatan ka na ba magresign during this pandemic? Or is it valid na magresign na?
Hello. Yes. Even if an employee is placed under floating status, nothing can prevent him/her to resign. Maaaari pa ring mag-resign ang empleyado kung gugustuhin niya ito, kahit pa naka-floating status siya.
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 hope you could help me.
I was placed on a floating status recently. My company just informed me through messenger videocall last May 14th and the effectivity date is the following day May 15th. Is that a legal notification time frame?
Also, our company is still operational but on a reduced man power. That fact that they are still operating, is it legal for them to placed employees on a floating status?
Thank you.
Hi.
For the first question, there is no notice period required to place an employee under floating status, especially in light of the COVID 19 pandemic and ECQ. Thus, even if you were notified 1 day only, it is valid. However, for the second question, in order to place an employee under floating status, there must be suspension of business operations, and not just a reduced manpower.
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! Is temporary shutdoen of business still a valid reason for floating status if there are still employees of the company in a work from home arrangement?
Thank you!!
No. Temporary suspension of business operations means there is no business operation to speak of.
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 my employer marked me as floating status employee then after 3months they assigned me to a job position (bpo) different my job description (IT) signed when i got hired. Is this a valid move or action by my employer? Can i contest that i am not suitable for that role since i dont have any experience with bpo and i might not get satisfactory performance rating? Also for the 3months floating status, will i get paid after reinstated to new role?
Hi. You need to check your employment contract. Technically, you can question the transfer if it is not what you have agreed upon at the start. For the second question, an employee placed on floating status is NOT entitled to payment of salary.
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.
I think my question wasn’t answered
Can you please advise?
Hi. I think your questions were already addressed in the first reply. Thank you
1.Good day, Is there any documents we need to submit to DOLE If the employee put on floating status?
2. Is company required to pay mandatories of floating status employee?
3. Is floating status applicable for operational company? But affected due to reduce in sales and business channel?
1. Yes. Please fill-up and submit COVID 19 Establishment Report. https://www.dole.gov.ph/wp-content/uploads/2020/03/ER-COVID19-Monitoring-Form_as-per-Labor-Advisory-09-s.2020.pdf
2. Pay “mandatories”? Are you talking about SSS, etc.? No. Employer is not required to pay these because there would be no basis (employee is not receiving any salary during the period when he/she is in floating status).
3. No. To justify placing an employee under floating status, there must be SUSPENSION of business operations. If there is reduction in sales, maybe the company can consider flexible working arrangements such as work from home, compressed work week, alternate/shifting schedule, etc.
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 would just like to ask, if the company puts us to temporary lay-off and it already exceeds 6 months, how much is the severance pay that we can get? Can you give me figures if possible? Or just an example on how we will be payed by our company?
If the floating status exceeded 6 months and you still haven’t been asked to report for work, that would be considered as constructive dismissal. An employee who is constructively dismissed is entitled to his backwages, which is the amount of salary you should receive starting from the date you were placed under floating status up to to the time of judgment by the Labor Arbiter. Please note you can only get backwashes as a form of monetary award in a Labor Case.
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.
in a “floating status” can you request to be granted a separation pay, not wait for possible max of 6 months work suspension. Instead find and start new job with the new company?
No. You need to wait for a declaration from the company that it will terminate employees based either on redundancy or retrenchment. Otherwise, you cannot demand for payment of separation pay.
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.
A friend of mine has been placed on floating status (No Work No Pay) due to retrenchment/redundancy. All new hires were already secured as they were transferred first in a different account/project. Is it lawful for the company to do that?
Can we take legal action on this?
Hello. If the employee had no work due to retrenchment/redundancy, then the employee was NOT placed in floating status, but rather was terminated. In that case, he/she should receive separation pay of 1 month pay for every year of service in case of redundancy and 1/2 month pay for every year of service in case of retrenchment. Placing an employee under floating status necessitates that there is SUSPENSION of business operation. So in your case, it is inconsistent to put an employee under floating status for either retrenchment / redundancy.
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.
Pwede po mag tanong? Yong notice of Floating po ba dapat 30 days before mag take effect? Kasi po naka receive ako ng notice may 11 effective agad may 18th. Tapos yong nakalagay na reason sa notice is ramp down pero sa meeting namin with the management at minutes ng meeting due to health issues kaya kami na float. Wala na kasi work from home arrangement sa account namin. So dapat onsite na.
Hi. Since placing an employee on floating status is NOT termination of employment, even if you received the notice 7 days prior to its effectivity, that will NOT make the floating status illegal. However, in order to justify placing you on floating status, there must be SUSPENSION of business operations. If the business operation was suspended due to health reasons, that is considered valid because in that case, there is still suspension of business operation.
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.
What if they just cut down employee? Our company cut half of the employees but half is still in operation is it still legal to float them? Also the company promise to pay the 2nd month but then today they haven’t receive the salary and were advise that it will all be release on backpay.
Yes the company may proceed in floating the employees if there is no more assignment for them during this period. Please ask your company when you will receive the your salary. Technically, if the leaves are already exhausted, the employees may be placed on no work, no pay 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,
Our company have decided to temporary close our establishment due to the COVID-19 pandemic situation. We have not been told that they might give us a floating status, but we believe that they are leaning towards that decision. If you so, are the employees allowed to look for part time jobs until the temporary closure has been lifted? We were told to look for other employement opportunities while the temporary closure is in effect, but we;re not sure whether it is legal or illegal since we have to get certificates (EOC) and fulfill other requirements before applying for other jobs. Isn’t that moonlighting?
Hi. That is not considered as moonlighting if the company is the one that allowed it in the first place. It shall only be considered as moonlighting if the Company prohibited employment elsewhere. Yes you may seek for employment in the meantime- it is not illegal. You need to get assurance from the company that they will release your cert. of employment if that will be needed in your new job.
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.
Thank you for your response.
In addition, the company gave us our Certificates of Employment but it has a 2 month validity, what does that mean? We didn’t get any explanation as to why it has a validity period.
I would be best if you would ask your company as regards the “2 month validity.” However, you may tell them that nowhere in the DOLE rules state that the COE must have a validity period. Under DOLE Labor Advisory No. 06-20, the COE certifies the date when the employee was hired and the date of termination and the type of work in which he/she was employed. Limiting the validity period would only be burdensome to the 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.