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AT A GLANCE
- “Floating status” or temporary “off-detail” of an employee is considered as a form of temporary retrenchment or lay-off.
- The placement of an employee on “floating status” must not exceed six months. Otherwise, the employee may be considered constructively dismissed.
Floating status, otherwise called temporary lay-off, temporary off-detail, or temporary retrenchment, is considered a valid management prerogative. Article 301 of the Labor Code states that a bona fide suspension of operation of business or undertaking for a period not exceeding six (6) months shall not terminate employment.
The law says:
“ART. 301. When employment not deemed terminated. – The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such 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.” (Article 301, Labor Code)
In situations as such, the employment status of a temporary laid-off employee is nots deemed terminated, but merely suspended.
Jurisprudence says:
“When a lay-off is temporary, the employment status of the employee is not deemed terminated, but merely suspended.” (Gloria dela Cruz v. National Labor Relations Commission, G.R. No. 119536, February 17, 1997)
In the case of Seventh Fleet Security Services, Inc. v. Rodolfo Loque (G.R. No. 230005, January 22, 2020), the Supreme Court held that while placing an employee on “floating status” is a valid management prerogative, such period shall not be more than six (6) months.
Here, Rodolfo Loque (Loque) was hired as a security guard by Seventh Fleet Security Services, Inc. (Seventh Fleet). Loque alleged that he was treated with hostility after he filed a complaint for underpayment of wages and other money claims against Seventh Fleet. He claimed that on December 2013, he was suddenly relieved from his post in Seventh Fleet’s client and Loque’s place of assignment. The next day, Loque received an order suspending him for 10 days. After the lapse of his 10-day suspension, or on January 7, 2014, Loque allegedly reported for work, but he was informed that he was placed on “floating status” and was advised to wait for a call from Seventh Fleet.
After being on “floating status” for six months and twenty-one days, Loque filed a complaint for constructive dismissal against Seventh Fleet. The Labor Arbiter held that Loque was deemed already constructively dismissed having placed on floating status for more than six months. The NLRC held that placing Loque on floating status was a valid exercise of Seventh Fleet’s management prerogative. The Court of Appeals upheld the ruling of the Labor Arbiter.
The issued before the Supreme Court was that:
Does the act of placing an employee on floating status for a period longer than six months constitute constructive dismissal?
In security services, the “floating status” or temporary “off-detail” of an employee may take place when there are no available posts to which the employee may be assigned.
The instant controversy centers on the legality of Loque’s “floating status.”
In security services, the “floating status” or temporary “off-detail” of an employee may take place when there are no available posts to which the employee may be assigned — which may be due to the non-renewal of contracts with existing clients of the agency, or from a client’s request for replacement of guards assigned to it.
While there is no specific provision in the Labor Code governing the “floating status” or temporary “off-detail” of employees, the Court, applying Article 301 of the Labor Code by analogy, considers this situation as a form of temporary retrenchment or lay-off.
Article 301 of the Labor Code provides that:
ART. 301. When Employment not Deemed Terminated. — The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such 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.
The Supreme Court thus held that:
“Conformably with the above provision, the placement of an employee on “floating status” must not exceed six months. Otherwise, the employee may be considered constructively dismissed. Furthermore, the burden of proving that there are no posts available to which the security guard can be assigned rests on the employer. However, the mere lapse of six months in “floating status” should not automatically result to constructive dismissal. The peculiar circumstances of the employee’s failure to assume another post must still be inquired upon.
In this case, it is undisputed that Loque was placed on floating status beginning on the lapse of his 10-day suspension on January 7, 2014. Thus, at the time he filed the complaint for constructive dismissal and money claims on July 28, 2014, he has been on “floating status” for six months and 21 days.”
However, the Supreme Court cautioned that not every instance of placing an employee for a period of more than six months is a case of constructive dismissal. As such:
“It is manifestly unfair and unacceptable to immediately declare the mere lapse of the six-month period of “floating status as a case of constructive dismissal, without looking into the peculiar circumstances that resulted in the security guard’s failure to assume another post.”
Related article: Tardiness and Absenteeism as Neglect of Duty
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