Dear Atty. Joji,

I work for a company that assigns employees to different clients. My previous assignment ended, and my employer informed me that I was being placed on “floating status” while the company looked for another assignment for me. I was told that I had not been terminated and was still considered an employee. However, I am currently not reporting for work and am not receiving my regular salary. How long can an employer legally keep an employee on floating status? Can prolonged floating status amount to constructive dismissal?

Trish

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Dear Trish,

As a general rule, an employee may be placed on bona fide suspension or “floating status” for a period not exceeding six months, subject to the requirements of law. Floating status is commonly encountered in industries where employees may temporarily have no available assignment or where the employer’s operations are legitimately suspended.

The concept finds basis in Article 301 [formerly Article 286] of the Labor Code, which provides that the bona fide suspension of the operation of a business or undertaking for a period not exceeding six months shall not terminate employment. However, placing an employee on floating status is not an unlimited management prerogative.

Placing employees on “floating status” or temporary “off-detail” is a valid management prerogative, typically exercised by security agencies reliant on service contracts. The Court explained the nature of “floating status,” as understood in the context of security agencies, in the case of Salvaloza v. National Labor Relations Commission: “Temporary “off-detail” or “floating status” is the period of time when security guards are in between assignments or when they are made to wait after being relieved from a previous post until they are transferred to a new one.

It takes place when the security agency’s clients decide not to renew their contracts with the agency, resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. It also happens in instances where contracts for security services stipulate that the client may request the agency for the replacement of the guards assigned to it even for want of cause, such that the replaced security guard may be placed on temporary “off-detail” if there are no available posts under the agency’s existing contracts.

During such time, the security guard does not receive any salary or any financial assistance provided by law. It does not constitute a dismissal, as the assignments primarily depend on the contracts entered into by the security agencies with third parties, so long as such status does not continue beyond a reasonable time. When such a “floating status” lasts for more than six months, the employee may be considered to have been constructively dismissed.”

Thus, an employer cannot simply label an employee as being on “floating status” to avoid the consequences of termination. There must be a genuine reason for the temporary suspension of work or assignment. As a general rule, once the allowable period expires, the employer must recall the employee to work or validly terminate the employment in accordance with law. Failure to do so may result in constructive dismissal. Hope this helps.

Atty. Joji Alonso