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)
Hi, I am a regular employee for ten years in a real estate company. Our company resumed its operation last May 16, 2020, Is it considered as a suspension of operation? If so, in what aspect, if they still operating? I am on a floating status started on May 16, 2020. But I only received a notice last May 17, 2020. Is it okey to be notified a day after or late notice compare to it’s effectivity? Is it okey if I work under the other company while I am on a floating status then stop it and return to my original work on the sixth month of floating status? Or what if the real estate company who made me as floating employee did not accept my return?
Hi. To answer your questions – “Our company resumed its operation last May 16, 2020, Is it considered as a suspension of operation?” The period when your company stopped operating during the ECQ was a necessary consequence of the directives of the government regarding closure of non-essential business establishments. So yes, it was a suspension of business operation (from March 16 to May 15). If they operate today and they placed you under floating status, it is because they could not, in the meantime, find you an assignment. Although the company now is operating and did not stop its business operation, it is legally allowed to put employees on floating status for lack of assignments. There is no required number of days for notice. It suffices that you were notified. So if you received the notice last May 17, but the commencement of the floating status is May 16, it is legally permissible. The company must provide you with work before the expiration of the 6 month period. Otherwise, you will be considered as having been illegally (constructively) terminated.
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, can a supplier of construction materials company who is now operating 50% put an employee into floating status? If yes, what is the procedure?
Yes. For those who would not be able to receive work/assignments during this period, those employees may be placed on floating status. The company has to notify (written letter) the employees of their floating status which must not exceed 6 months. Company has to submit Establishment Report due to COVID 19 (downloadable in the website of DOLE).
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 account is temporarily suspended and we were not advised that we are on floating status but currenly on no work, no pay scheme. Is this legal?
Yes. This is legal. You need to clarify though on your employer whether you are already being placed on floating status or not. This notwithstanding, the period when you were placed on no work no pay should be the reckoning point of the 6 month 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.
Due to the current situation here in the philippines, one of the affected workers are pregnant women, who will not be allowed to report for work. In this case, in preparation of DOLE Establishment Report, are we gonna also include them in the list? Thank you.
Yes. They are still considered as affected employees even though they are pregnant.
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 regular employee and due to covid 19 is currently in floating status. Announced is GCQ in metro manila by june 1. Is it legal for my employer not to resume operation even if we are covered by gcq and return us to paid labor by then? And if so or not can you give me a link of the memorandum or law so i can have in writing please. Thank you
Yes, it is legal for your company not to resume operations by June 1. Whether or not the company will resume its operations despite the ECQ is a business prerogative.
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:
This post is really informative, thanks for sharing.
On the aspect of SSS, Pag-Ibig and Philhealth, how is this affected? Say the employee stays with the company for the duration of the floating status? Will the company still pay their percentage of it? Also, how does this affect the existing benefits of the employee, (i.e. the employee is on its 3rd year of employment and per contract will be entitled to HMO) will the benefit be suspended as the employee has become on floating status?
Thank you so much.
The employer is not bound to pay SSS, Philhealth and Pag-ibig benefits during period of placing an employee on floating status. As regards the HMO, this is an added benefit given by the company. Hence, you need to ask your employer about it. However, just like floating status, generally, this is not included in the computation of the period (The 6 months is not included in the 3 year period). But then again, you need to clarify this with your HR.
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.
Thanks
Hi I just wanna ask this because Im working in a BPO company, and yesterday we had a meeting with the management and HR to inform us that our program (account) needs to closes, and hundreds of employees are in a floatings status untill they find another account or program for us. our last day is on Saturday and they just informed us 3 days prior the dismisal. They said that its a no work no pay, Is it right? we are not working in the account it self but we are working in the company(teleperformance). we are willing to work because of the pandemic its hard to look for another job. most of us is a bread winner of our families and We are the only one that they can rely on. if the maximum of floatings status is 6 months, we will gonna die all because of starving
Since you are in a BPO company, the company is right to put you on floating status for a period not exceeding 6 months since there would be suspension of an aspect of business operation. Placing you under floating status is not termination. It will only amount to termination if after 6 months, the company has not yet provided you with work. An employee placed on floating status is on a No Work No Pay scheme, unfortunately. While we understand your situation, that is also the risk/challenges involved when working for a BPO company.
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 the above case. Would a company who continue to operate and continue to recruit new employees who are willing to risk working on site to replace employees on float status be legal?
It depends. If the employees placed on floating status, and the new hires/prospects are NOT going to perform the same duties and responsibilities, then the company may continue on hiring. Otherwise, there is no point hiring employees who would do the SAME job with those placed on 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.
can an employer place a n employee under floating status/off detailing w/o notifying the department of labor and employment? Can security of tenure be applied to protect the rights of the employee on this case?
The company must submit Establishment Report on COVID (downloadable from DOLE website). An employee may only be placed on floating status because of suspension of business operations. Security of tenure means that the employee cannot be terminated from employment without just or authorized causes provided by the Labor Code.
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 was placed as floating status but my manager still give me a jobs to do as if I am a regular employee. Is this lawful?
Absolutely NOT. If you are placed on a floating status, then you should have no job. However, if the company gives you work to do, you need to demand your salary for the days you worked.
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.