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    What Is "Floating Status"?

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    Ched Perez
    Floating status refers to temporarily laying off employees due to a suspension of business operations for no more than six months. It is a valid exercise of management rights under Article 301 of the Labor Code. However, failing to recall employees after six months, ignoring requests to return to work, or other acts making continued employment impossible amount to constructive dismissal. The employer bears the burden of proving a bona fide suspension of operations and that no other positions were available to avoid termination.

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    What Is "Floating Status"?

    Uploaded by

    Ched Perez
    432 views2 pages
    Floating status refers to temporarily laying off employees due to a suspension of business operations for no more than six months. It is a valid exercise of management rights under Article 301 of the Labor Code. However, failing to recall employees after six months, ignoring requests to return to work, or other acts making continued employment impossible amount to constructive dismissal. The employer bears the burden of proving a bona fide suspension of operations and that no other positions were available to avoid termination.

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    Floating Status

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    Floating status refers to temporarily laying off employees due to a suspension of business operations for no more than six months. It is a valid exercise of management rights under Article 301 of the Labor Code. However, failing to recall employees after six months, ignoring requests to return to work, or other acts making continued employment impossible amount to constructive dismissal. The employer bears the burden of proving a bona fide suspension of operations and that no other positions were available to avoid termination.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    432 views2 pages

    What Is "Floating Status"?

    Uploaded by

    Ched Perez
    Floating status refers to temporarily laying off employees due to a suspension of business operations for no more than six months. It is a valid exercise of management rights under Article 301 of the Labor Code. However, failing to recall employees after six months, ignoring requests to return to work, or other acts making continued employment impossible amount to constructive dismissal. The employer bears the burden of proving a bona fide suspension of operations and that no other positions were available to avoid termination.

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    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”?


    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.” 

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