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)
I am on a floating status since June 6, 2020. I would like to ask if ever that I seek outside employement? They are also forcing us to move for a temporary work from home work when our original contract was permanent work from home. They are also hiring and yet not accomodate the hundreds of floating employees.
An employee on floating status is still considered employed by the company. If you wish to seek outside employment while on floating status, you must make sure that this is allowed based on the provisions of your Employment Contract.
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 can help. I’m on a floating status since April 17, 2020. I opt not to go back to work even the ECQ will be shifted to GCQ in my location. Currently, my location is still in ECQ and is now tagged as the COVID-19 epicenter in Central Visayas. Can I opt not to go back to work because no one can assist my father who is a senior (69 years old) even if ECQ will be shifted to GCQ? As I know, senior citizens are still not allowed during GCQ. If yes, am I entitled for a separation pay from my employer or do they have the right to terminate my employment for this reason?
Thank you in advance.
Recalling employees back to work is part of management prerogative. If an employee refuses, he may be terminated by reason of willful disobedience.
2. In case of voluntary resignation or termination due to willful disobedience, the employee will not be entitled to 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, Asking for a friend who was put on leave without pay. Reason: no more work for their peoject group as of March 15, due to client suffering from effects of Covid pandemic.
Here are more details:
March 15: End of actual work
March 15 to May 8: no actual work, but paid for this while benched, perhaps to see if they can still be assigned to another project.
May 11: Instructed to use all leaves earned starting May 11. If all leaves used up, next work day will be the start of “forced leave without pay”.
No specific duration of forced leave mentioned to employees. Recently, they were told that they will still be on leave until end of July.
After July, very uncertain, but based on what other employees told them, separation pay in the past is given after 6 months. However, the employer did not specifically mention this to the employees.
Manager informally said that if an employee is able to find work elsewhere, there is no need to give 60-days notice to employer. They can release an employee in a few days.
Questions:
1. Is the forced leave without pay a correct floating status? Or is this contructive dismissal?
2. If this is a legal floating status, when will the count of 6 months start?
3. May an employer put employees on floating status, without giving them a specific period?
1.Yes, it is a correct Floating status.
2. The 6 month period is counted from the suspension of the business operation.
3. An employer may place an employee on a floating status for a maximum of six (6) months. After six months, the employees should either be recalled to work or permanently retrenched following the requirements of the law.
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 just ask this: What if after 6 months, this covid condition still persists and business cannot still recover, financially, are companies allowed to extend the 6 months period, say, another 3 months? Thanks!
The law provides a maximum of six (6) months period where an employer may suspend the operation of its business. The suspension of business operation is a management prerogative which is allowed by law.
However, if the covid-19 pandemic still persists AND the country or city where the business establishment operates is under community quarantine which restricts the movement of people affecting the income of the employers, the worst scenario is the permanent closure of business operations. The economy does not favor closure of business establishments. The extension of the 6-month period now depends on the issuances or advisories of the government.
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.
Hello..if an employee is put on floating status and asked to come back to work but can’t…..can the floating status be renewed from the day the employee refused to come back to work? The reason the employee can’t go back to work is because of now internet connection since the company is currently letting the employees work from home. The company gave the chance to go back to work but the employee could not. How does it work then? Thank you in advance for your advice.
When an employee under floating status has been asked by the employer to report for work, the employee may return to work. The employee may refuse to return to work provided that the refusal is lawful.
Otherwise, said employee may be charged by the employer for insubordination or absence without leave which may lead to termination of employment.
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 read DO 174 about floating status being reduced to maximum of 3 months. Can you please confirm this?
We assume that you mean Department Order No. 174, Series of 2017 (DO 174). It is the rules implementing articles 106 to 109 of the Labor Code, as amended.
DO 174 did not reduce the period provided in the labor code where an employee may be placed under floating status for a maximum period of six (6) months.
The maximum period of three (3) months provided in Section 13 (c) of DO 174 refers to where the termination results from the expiration of the Service Agreement, or from the completion of the phase of the job or work for which the employee is engaged.
The three 3-month period provided in DO 174 does not apply to suspension of business operations or fulfillment of military or civic duty as provided under Article 301 of 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. Should the company still process the maternity leave of the floating employee?
Yes.
An employee under floating status does not lose employment. The only difference is that she receives no monthly salary on the basis of “No Work, No Pay.” As such, the employer is mandated by law to process the maternity leave of an employee under floating status. The reason is that the employer-employee relationship between the two was not severed.
Company is operational with 30% workforce only. Can company put the remaining 70% to floating status? Thank you.
Yes.
Placing employees under floating status is an exercise of the employer’s management prerogative. However, the exercise of such prerogative by the management must be in GOOD FAITH and in compliance with applicable laws. The exercise must be intended for the advancement of the employer’s interest.
It should NOT be exercised for the purpose of evading the employer’s legal obligation due to the employees. It should not be used to circumvent the rights of the employees under the law or under valid agreements.
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 currently on a floating status since May 17, 2020 which we are not informed. So my question is… Are we entitled to get a 1 month salary?
An employee placed on floating status is not entitled to any salary during that period. The principle of no work no pay shall apply. If you were not informed, but then starting on May 17, no work was given to you or that you did not render any work, then you will not also receive any salary. It would be a different issue if you rendered work from May 17, and yet you were placed on floating status. In that case, you are entitled to your 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.
Hi
I am currently an HR Specialist in a Recruitment Firm due to the current situation the revenue decreases and cannot support its employees salary and other government mandated payments. The CEO is been thinking to put some employees on Temporary Retrenchment (which will not exceed 6 mos). But the business will still continue to operate and will not be on temporary closure. Is it legal?
Yes.
Temporary retrenchment or lay-off is an exercise of the employer’s management prerogative. However, said management prerogative must be exercised in GOOD FAITH, meaning, one which is intended for the advancement of the advancement of the employer’s interest.
It should NOT be exercised for the purpose of evading the employer’s legal obligation due to the employees. It should not be used to circumvent the rights of the employees under the law or under valid agreements.
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.