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!
How long should I be on floating status before my employer provides contract termination and redundancy pay?
The employer can only put you on floating status for a period NOT exceeding 6 months.
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.
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Hi,
What are the steps need to follow before placing an employees on floating status ?
First, any of the following circumstances must be present:
1. Bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months; or
2. Fulfillment by the employee of a military or civic duty
Second, if the reason is based on number (1) above, the employer must notify the Department of Labor and Employment (DOLE) AND the affected employee, at least month prior to the intended date of suspension of business operations.
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 employees are put on floating status for 6 months as business temporarily stop operation, are they entitled to separation pay if they won’t wait for 6 months without work, but opted to look for another job?
No. They can only be entitled to separation pay IF after the 6 month period, the employer could not reinstate them to their former position.
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 I was put on a floating status since last March. As my work role is not yet needed at the moment but the rest of my coworkers has been working continuously. I would like to know, lawfully, if how long should be the ‘floating status’ lasts given the scenario above.
Thank you so much.
Floating status should not last for more than 6 months.
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 have lots of questions:
1. What are the benefits of an employee under floating status?
2. Do the employer need to submit notices of floating status to different agencies such as BIR,SSS,Philhealth and HDMF?
3. Are employeed allowed to pay voluntarily government contributions?
4.If they pay for government contributions voluntarily, Is there a serious effect on the employer?
Thank you very much!
1. The term “benefits” is relative. We assume that you mean the legal good side of floating status. They are the following:
a. The employee under floating status is NOT terminated
b. Floating status does not exceed six (6) months
c. After six (6) months, the affected employee has one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty to make a decision whether he or she desires to return from work
d. If the affected employee desires to return from work, he or she is still entitled to his or her seniority rights
2. One of the instances where an employer may place the employee under floating status is the bona fide suspension of business operation. In this case, the employer is required to notify the Department of Labor and Employment (DOLE) at least one (1) month prior to the intended date of suspension of business operation which results into placing an employee under floating status.
3. An employee who was terminated from employment may voluntarily pay his government contributions such as SSS, Philhealth, or Pag-ibig. The law encourages voluntary payment of government contributions even after separation from employment.
However, while being employed, it is mandated by law that the required contributions shall be deducted by the employer and timely remit the same to the concerned government agency.
4. If you would mean that the employee is still under the employ of the employer, yes, there is a legal effect to the employer. The payment of mandated government contributions is shared by the employer and the employee. The employer is obliged by law to pay his contribution and to deduct and timely remit the employee’s contribution. The employer may be sanctioned by law when he fails to pay the government contributions.
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 morning,
How do we accomplish this “Floating Status”.
Is there a form?
Thank you.
You need to submit the Establishment Employment Report Due to Covid (downloadable from website of DOLE). As for the notice to employees, there is no specific form or template.
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 need your take on this. You are currently on work from home status then your employer asks you to work from office (with shuttle provided). Sadly, you are a high-risk individual due to asthma. Is it still legal for them to put me in floating status due to my condition?
I am able to work from home but not at the office.
No, this is not legal for them to do so. They can only place an employee under floating status for suspension of business operation. Having an “asthma” is not a ground to place an employee under floating status. Please demand that you be given work.
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, what if the company is physically closed but still operates online and they placed some of their employees on a floating status and their reason is that they filed for a temporary closure in DOL? But the management can’t show us the verified establishment report from DOLE.
The questions are, “Were you notified by the management of such action?”, “Have you signed any document from the management placing you under floating status?”
Please be guided that the instances allowed by law to place employees under floating status are the following:
1. Bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months; or
2. Fulfillment by the employee of a military or civic duty.
Also, the employer should notify the Department of Labor and Employment (DOLE) and the affected employee, at least one (1) month prior to the intended date of suspension of business operations that consequently places an affected employee under floating status.
Unless it is shown that there is compliance above, it is safe to assume that there is no temporary closure of operations where placing an employee under floating status could be anchored upon.
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!
1. What happens if, within 6months, the employee on floating status engaged in an employment (outside the company) without informing the employer or at least resigning properly?
2. Is it possible to give job orders to an employee under floating status in an “as needed-basis only” and only pay them based on the actual hours worked?
On No. 1 – If the employee was asked to return to work but did not return despite notice, it may be considered as abandonment which is a ground for termination of employment.
On No. 2 – No. The concept of placing an employee under floating status connotes that there is suspension of business operations. So giving them work on “as needed basis” runs contrary to that.
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.