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!
We have been placed on a floating status for nearly 3 months now due to covid19. We were still on our training phase but the class has been suspended after ECQ was implemented in Cebu City. The site has been re opened last June 01, 2020 and we were informed that our training class will resume on June 08, 2020. Earlier today, we have received again from our trainer that the class will not be pushed through on the said date but will be moved on the 15th of June 2020 citing reason due to transportation issue. Is the reason enough that the company provided to move the CLASS or TRAINING? They have provided transportation to some employees but not all. Is this even fair or legal ? Please let me know. Thank you !
Yes, the company may move the training at a later date due to lack of sufficient transportation. This is a management’s prerogative already and there is nothing illegal about it.
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 legal that they put some agents on on floating status even if the account is still functioning? Even if they told the agents that they need to put them on floating status because the clients cant afford to pay them already? And they are not BIR Registered, fyi. Thanks
No, it is not legal to put on floating status the employees if the account is still operational. At most they must ROTATE the employees to give everyone a fair chance to work and earn.
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! Po my concern is about may floating status. Merchandiser po ako of Nestle Phils. Under agency po ako. 7 years service sa agency ko. In sort regular employee ako. Starting January hindi po ako na renew sa outlet ko sa supermarket
Because po sa hindi ko maindintihang dahilan ng manager ng store good performance naman po ako 5years na nga ako sa outlet nayun. Now back to agency po ako kung saan ako sumasahod. And regular ako, by march dapat may new outlet ako pasig area marikina ako. Hindi po ako natuloy mag intro sa new outlet ko bcoz nag lock down. Nag ooperate po company ko may pasok lahat ng merchandiser kasi open ang supermarket. Pero wla akong work kasi lockdown til now wala akong work kasi wala pang masakyan papuntang office.. Tanong ko lang po may karapatan po ba ako mag karoon ng sss subsidy? Kasi hindi po nila ako isinama hindi ko naman po kasalanan namawalan ako ng outlet employee nila ako dapat gibawan nila ako ng paraan mahabapan ng outlet malapit sa location ko madami pong supermarket sa marikina pero wala po silang action and kung mag reresigne naman po ako may matatanggap po ba akong seperation fee. Thank you po and Godbless I hope po masagot nyo po ako..
Hello. Hindi mo sila mapipilit na mailagay ka sa mas malapit na location sa residence dahil depende kasi yun sa kontrata nila. If wala kang work, hindi sila required magremit ng SSS. Kung kusang loob ka na aalis sa trabaho/resignation, WALA kang makukuha na 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.
Hi! Can an employer issue float status notice to an employee immediately or do we need to issue 30-day notice? Because of the pandemic, some of our clients pre-terminate their contracts with us.
The nature of the business is a job contractor.
No, there is no prior notice/period of days required since this is not termination of employment. However, they must still be notified.
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.
We have a number of employees on floating status only because they had personal reasons and made a choice not to report to work during this pandemic (ECQ), their spouse doesn’t want to take the risk and have them report to work. We know we can not force them to report to work. As of this writing (GCQ), we are constantly contacting them to return to work. Is it proper to contact floating employees? Or is it the employee’s responsibility to do follow up with HR? What if a floating employee, tagged as a regular employee, declines a job offer under GCQ, is there a timeframe that is given to the employee to accept future job offers to resume work?
“Is it proper to contact floating employees? Or is it the employee’s responsibility to do follow up with HR?” No, the company must be the one to contact floating employees and not the other way around. “What if a floating employee, tagged as a regular employee, declines a job offer under GCQ, is there a timeframe that is given to the employee to accept future job offers to resume work?” You need to send Notice To Explain for possible violation of your company code of conduct / insubordination for refusal to return to work or accept a valid job offer. If the explanation provided is not justified, you need to inform the employee that his decision not to accept the job offer without any justifiable reason. may amount to resignation.
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. The assigned client to us immediately ceased its operation with our employer. Thus, putting us into one month no pay and additional one month off detailing status (May 2, 2020 to June 2, 2020). Since the off detailing status already lapsed today as per agreement and based on our contract, are we already entitled to separation pay? Can we demand from our employer such redundancy because we are no longer interested fro re-profiling? Thank you in advance.
Hello. You need to ask your employer first for work. Demand for work from your employer. If the employer states that they can no longer provide work for you, then that’s the time you can demand for 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.
Hi, I am grateful to found your explanation about the floating status. In our company, almost of us was under 6 month work suspension and we are on no work no oay scheme. What are the compensation we can get if we just resign? We can’t afford to wait for 6 months without any income.
If you resign, y ou will just get your proportional salary (last pay, assuming this was not yet given to you) for the days your worked. Please note that an employee placed under floating status is NOT entitled to salary during the period that he is on floating status. Aside from your salary, you should also get your proportional 13th month pay and proportional Service Incentive Leave OR cash equivalent of your vacation leave
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 an employer issued floating status notice to an employee immediately?
Nature of business is a hotel industry which is greatly affected this time of pandemic crisis.
Hi. The answer to your question is “Yes.” There is no specific period (prior notice) as to when to notify the employee that they are being 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.
Hi! I just stumbled upon your site because I was searching if float status is still eligible for 13th month pay
Yes, the employee is entitled to the 13th month pay, but the period wherein the employee was placed under floating status shall NOT be included in the computation of the 13th month pay. This period shall be EXCLUDED. You will only receive the proportionate 13th month pay on December, or when you resign during the 6-month period, or when you are terminated (for lack of assignment/work after 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. We have employees that were put on floating status. Since it’s no work no pay, are they going to pay their Govt contributions, voluntarily? For example, SSS? Thank you.
Yes, they may pay their SSS contributions voluntarily.
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.