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)
Sir/Ma’am
Me and some of my colleagues were put on floating status since April 10th if I’m not mistaken up until today. We were always sending follow ups to our Supervisor and manager about our employment status. However, we received an email containing a Return To Work Order(RTWO) stating that we were ABSENT WITHOUT OFFICIAL LEAVE since Marc 17th 2020, but were still working for the company until April 10th, they stated that we did not attempt to do a follow up or report to our work, even though we sent multiple follow ups to our supervisor and manger. We have evidence/screenshots of our follow up emails/msgs. What would be our best action now? Please advise. Because on my understanding, they are just trying to put us on floating status to force us to our resignation. Thank you for your assistance.
I would like to ask on how many days does the employer needs to inform their employees before the closure of the business and put employee on floating status.
When on floating status, do I still get paid the company?
An employee placed on floating status is not entitled to any salary during that period. The principle of no work no pay shall apply.
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. Just wanna ask, our company has put 8 of my colleagues into floating status immediately without hearing/proper grounds as to why they were on that status. They have not informed us also why they are slowly putting some people on floating status. They are all tenured-regular employees some were into their 7th year with the company while others are not lesser than 2 years. Without proper consultation, is that action legal? Its a no work no pay. In this time of pandemic we understand that this may happen but why sudden and immediate?
Our company’s client in UK did not renew the contract due to the efffect of covid19. So our account was dissolved. They said we will be transfer to other account, ive been in two interviews but I was not qualified for the position. I am in no work no pay situation now for almost two months. I want to be redundiate so that I can get my seperation pay. Do you think I can file a case?
May I know if it’s legal to put the employee on a temporary lay-off status due to huge reduction in the volume of work? Our company did not stop business operation but not all were given work assignment due to the effect of the pandemic especially our Technical Field Engineers. Thank you so much!
The management is NOT correct.
The legal basis for “floating status” is Article 286 (now 301) of the Labor Code.
To place the employees under floating status, the basis of the management shall be on 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.
Please be guided that the performance of an employee as a basis for placing him or her under floating status is NOT warranted under the law.
Granting that the management has provided you the report you have requested, the same is immaterial. It should be clear that the performance of any employee has NOTHING to do with floating status. The only bases allowed under the law are those two (2) mentioned above.
Lastly, it is advised that you formally write a letter to the management seeking clarification as to why you were placed under floating status. At the same time, continue to report for work as legally speaking, there is no floating status in your case.
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 company is using the monthly earned leave type, so basically an agent earns his/her leaves every month. My questions is, I am in a floating status that started from April to June. Will get my earned leaves on those months that I was floating?
we were on no work pay since march 17 and in June 29 it was discussed to us putting most of the employees on floating status for another 6 months starting July 6 so that is adding a further 6 months on top of the 4 months that we were on no work no pay since march 17. The company is a bpo company with a few accounts related to airline and travel industry and few accounts have closed and the staffs went redundancy. As for our account they placed us on floating status. There are more than 40 staffs in this division and less than 15 staffs are working. Is this even right for them to put most of us on floating without pay? They encouraged us to find another job and resign. Its seems like they are abusing this law because if we are forced to resign they pay us nothing and need not pay for any redundancy fee. Who can last for 6 months without pay?????? given the fact that we were on no work no pay since march making that almost 10 months. Let’s face the fact the airline industry is in very bad shape.
We had a meeting today about this floating status. Our company ask us to sign a document regarding this. We are on a floating status for six months, but as per advised we will still have operation until december 2020 on a call basis or as needed to go to work. Please enlighted us on this.