You may notice that my recent posts deal with different topics on employment where I share some of the best practices that I have learned over the years in my combined work experiences in the government and private workplaces that I have been to.
Today, I will be discussing about the important things you need to know if and when an employee is placed on a “floating status.”
Q: What does it mean when an employee is placed on a floating status?
A: An employee placed on a floating status means that he/she is temporarily suspended, temporarily laid-off or temporarily retrenched from employment.
Q: What is the status of employment of an employee placed on a floating status?
A: Since the suspension, lay-off or retrenchment is only temporary in nature, the employee is not terminated from employment and remains to be an employee of the company.
Q: What is the legal basis of placing employees in floating status?
A: There is no express provision laid down in the Labor Code of the Philippines about floating status but the same can be inferred from the right given to the employer in suspending the operation of its business or undertaking for a limited period, to wit:
Article 301. When employment not deemed terminated.- The bonafide 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.Labor Code of the Philippines, as amended.
Q: What are the requirements for the floating status of employees to be considered as a valid measure implemented by the company?
A: To be valid, the following requisites must be complied with:
(1) There must be a bonafide suspension of operations or undertaking;
(2) The period of suspension must not exceed six (6) months*;
* UPDATE!!! Last October 23, 2020, DOLE issued DO No. 215 which amended the rule on suspension of employment relationship.
Under DO No. 215, in cases of declaration of war, pandemic and similar national emergencies, the employer and the employees (through the union or with the assistance of a representative of DOLE) can meet in good faith for the purpose of extending the suspension of employment. This extension can last for a period not exceeding six (6) months. As a result, said extension allowed the suspension of employment to last for up to one (1) year. (I will discuss this in more detail on my next post!)
(3) The suspension must be done in good faith with clear proof of the need to suspend operations or undertaking; and
(4) One (1) month prior notice to the concerned employees and DOLE.
Q: Is an employee placed on floating status entitled to receive salary while on floating status?
A: No. The employee will not be entitled to receive any salary or financial benefit from the company during the entire floating status. The principle of “no work, no pay” shall be applied.
Q: What happens after the six-month (or 12-month as per DO No. 215) period of floating status?
A: The employer must do either of the following:
(1) Recall the employee to work in his former position or if no longer available, to an equivalent position; or
(2) If there is no equivalent position, terminate the employment on the ground of redundancy or retrenchment, but subject to payment of separation pay in favor of the employee.
Q: What happens if the employer does not perform any of the two options above after the lapse of the period of floating status?
If an employee remains in floating status after the allowed period of up to 12 months (as per DO No. 215), the employer may be held liable for illegal dismissal of the employee. Once declared by DOLE NLRC as illegally dismissed, the employee shall be entitled to be reinstated to his former position without loss of seniority rights PLUS payment of backwages from the time of his dismissal up to his actual reinstatement. On top of that, the employee may be entitled to receive moral and exemplary damages and even attorney’s fees.
How I wish that placing an employee on floating status would mean to have a much needed break or vacation to swim and float on a white-sand beach somewhere just like the above photo. We all know that this is a serious matter that affects many employees today. I just hope that by reading this, you will be guided on your next steps. Always remember that life must go on and that we will all get through this.
Stay safe and healthy. This is Attorney Mommy, at your service!