(Understanding temporary suspension of work vs. permanent authorized-cause termination)

Executive Summary

In Philippine labor law, the label “force leave” is commonly used in workplaces to mean temporary lay-off or floating status when business slows down. Strictly speaking, “force leave” is not found in Article 298. It belongs under Article 301 (formerly Art. 286) on temporary suspension of work or business operations for up to six (6) months.

Article 298 (formerly Art. 283) governs permanent, authorized-cause terminations—redundancy, installation of labor-saving devices (LSD), retrenchment to prevent losses, and closure/cessation. These require 30-day prior written notice to both employee and DOLE, plus separation pay (except in closure due to serious losses).

Use this map:

Art. 301 = Temporary suspension (max 6 months): employment tie subsists; generally no work, no pay.
Art. 298 = Permanent termination for authorized causes: notice + separation pay.

Part I — What “Force Leave/Floating Status” Really Is (Art. 301)

A. Legal Nature

A bona fide, temporary suspension of work without severing the employment relationship.
May apply to all or some employees (e.g., rotating off-duty schedules) when there is a legitimate business exigency: seasonal lulls, supply chain shocks, renovations, canceled orders, regulatory shutdowns, etc.

B. Time Limit & Consequence

Cap: six (6) months in the aggregate from the start of suspension for a given employee.
On or before the 6-month mark, the employer must either (1) recall the employee to work or (2) permanently separate the employee under Art. 298 with full compliance.
Exceeding six months without recall or authorized-cause separation is typically deemed illegal dismissal.

C. Pay & Benefits During Floating

Wages: No work, no pay, unless a CBA/policy or a separate agreement grants a stipend.
Seniority/tenure: Continues to run; the employee remains on the rolls.
Leave credits: Not automatically charged; deduction requires policy basis and, prudently, employee consent.
13th month: Based on basic salary actually earned for the year; months with zero pay reduce the base.
HMO/Insurance/SSS-PhilHealth-Pag-IBIG: Follow policy and contribution rules; inform employees clearly if there will be changes or voluntary remittances.

D. Process & Documentation (Best Practice)

Memo to affected employees stating: (1) reason, (2) start date, (3) projected duration, (4) contact point.
Objective selection criteria if only some staff are floated (e.g., seniority, performance, skills match). Avoid discrimination or anti-union targeting.
Internal record of the business basis (board note, client cancellations, order books, renovation permits).
DOLE reporting in line with flexible work arrangement advisories (good practice even when not expressly mandated).

Part II — When Temporary Becomes Permanent: Article 298 (Authorized Causes)

A. Covered Causes & Minimum Separation Pay

Redundancy — When a position becomes excess due to reorganization, efficiency measures, or decreased business volume.
- Separation pay: At least 1 month pay per year of service, or 1 month pay, whichever is higher.
Installation of Labor-Saving Devices (LSD) — Technology/process changes that replace human work.
- Separation pay: At least 1 month pay per year of service, or 1 month pay, whichever is higher.
Retrenchment to Prevent Losses — To avoid serious, actual or imminent losses; must be necessary and the least drastic measure.
- Separation pay: At least ½ month pay per year of service, or 1 month pay, whichever is higher.
Closure or Cessation of Business
- Not due to serious losses: ½ month pay per year of service, or 1 month pay, whichever is higher.
- Due to serious losses: No separation pay (strict proof required).

Year fraction rule: A service fraction of at least six (6) months is typically counted as one full year for computing separation pay.

B. Mandatory 30-Day Prior Notice (Dual Recipients)

Serve written notice at least 30 days before effectivity to (a) the employee and (b) DOLE.
Notice must identify the authorized cause and the effective date. Failure in notice may taint the termination and lead to monetary consequences.

C. Good Faith & Fair Criteria

The employer bears the onus to show good faith, business necessity, and fair, reasonable selection criteria (e.g., efficiency ratings, seniority, disciplinary records).
Keep documentary evidence: audited financials (for retrenchment), revised staffing patterns (for redundancy), technology acquisition papers (for LSD), board resolutions (for closure).

Part III — The 6-Month Bridge Between Art. 301 and Art. 298

A. Decision Point

The six-month mark is a hard stop for floating status. On or before this date the employer must recall or lawfully terminate under Art. 298.
Silence or inaction past six months can amount to constructive/illegal dismissal.

B. Converting to Authorized-Cause Termination

Lead time: Send 30-day prior notices to employees and DOLE.
Compute separation pay at the higher-of formulas above.
Final pay package should include: earned wages, pro-rated 13th month, conversion of unused SIL as applicable, separation pay, and any other accrued benefits.

Part IV — Common Missteps & How Tribunals Treat Them

Endless “force leave” beyond six months → treated as illegal dismissal; employee may get reinstatement with backwages or separation pay in lieu, plus damages/fees when warranted.
Skipping the 30-day dual notice for Art. 298 terminations → may result in nominal damages and, in worse cases, findings against validity if due process is fundamentally impaired.
Using redundancy to mask misconduct → invalid cause; terminations must match genuine business reasons.
No objective criteria in choosing who stays/goes → risk of unfair labor practice or discriminatory termination.
Charging vacation credits to cover floating time without policy or consent → may be struck down; restore credits or pay.
Cutting HMO/benefits mid-float without clear policy → exposure to money claims; communicate changes in writing and apply uniformly.

Part V — Practical Playbooks

A. Employer Playbook (Compliance-Forward)

Diagnose need: Temporary? Use Art. 301; Permanent? Use Art. 298.
If temporary (Art. 301):
- Draft float memo (reason, dates, ≤ six months).
- Apply objective rotation if partial.
- Log the business basis and report flexible work arrangements to DOLE where applicable.
- Calendar the 6-month deadline.
If permanent (Art. 298):
- Choose the correct cause; assemble evidence.
- Issue 30-day prior notice to employees and DOLE.
- Compute and tender separation pay and final pay on or soon after effectivity.
Communicate: Town halls, FAQs, and one-on-one notifications reduce disputes.
Document everything: notices served, acknowledgments, computation sheets, payroll proofs.

B. Employee Playbook (Rights-Protective)

Ask for a written memo explaining floating status; note the start date.
Track six months from your own float start; follow up on recall plans before the deadline.
If converted to termination: Verify (a) cause, (b) dual notices, (c) separation pay math, (d) inclusions in final pay.
If floated beyond six months with no action: Consider filing through SEnA (DOLE) for conciliation; escalate to NLRC for illegal dismissal or money claims.
Avoid AWOL pitfalls: Keep contact details current; respond to recall notices promptly.

Part VI — Computation Corner

A. Separation Pay (Quick Examples)

Redundancy/LSD: Monthly rate ₱20,000; 4 years 7 months service → 5 years counted.
- Separation pay = ₱20,000 × 5 = ₱100,000 (or 1 month, whichever is higher).
Retrenchment/Closure (no serious losses): Same facts → ½ month × 5 = 2.5 months = ₱50,000 (but not less than 1 month, so ₱50,000 since higher than ₱20,000).

B. Pro-Rated 13th Month on Separation

Base: Basic salary actually earned in the calendar year ÷ 12.
Pay with final pay regardless of reason for separation.

Part VII — FAQs

Is “force leave” legal? Yes—as temporary suspension under Art. 301, for ≤ 6 months and grounded on a legitimate business reason.

Do floated employees get paid? Generally no (no work, no pay) unless a CBA/policy or agreement provides otherwise.

Can an employer rotate staff on and off? Yes, if fair criteria are used and the aggregate float time per employee does not exceed six months.

What happens at six months if business is still down? Employer must recall or terminate under Art. 298 with 30-day notices and separation pay as applicable.

Is preventive suspension the same as force leave? No. Preventive suspension is disciplinary and short-term pending investigation; floating is operational and can last up to six months.

Can the company deduct my vacation credits during force leave? Not by default. Charging credits needs policy basis and generally employee consent.

Part VIII — Model Documents (Plain-Language Outlines)

A. Temporary Suspension (Art. 301) Notice to Employee

Subject: Temporary Suspension of Work (Floating Status)
Reason: (e.g., plant renovation, client contract pause)
Effectivity: From [date] to [no later than date ≤ +6 months]
Pay/Benefits: No work-no pay (or stipend if any); summary of benefits handling
Recall Protocol: Contact method; employee must keep details updated
Signature lines for acknowledgment

B. Authorized-Cause (Art. 298) Notice of Termination

Subject: 30-Day Notice of Termination — [Redundancy / Retrenchment / LSD / Closure]
Business ground & evidence summary
Effectivity date (≥30 days)
Separation pay computation (rate, years of service, amount)
Clearance & final pay timeline
DOLE notice reference (date/file)
Signature lines

Part IX — Remedies & Forums

SEnA (DOLE): Fast conciliation for reinstatement, separation pay, or settlement of money claims.
NLRC (Labor Arbiter): For illegal dismissal, separation pay differentials, nominal damages for notice defects, and other money claims.
DOLE Field Office: For compliance inspections on labor standards aspects that may arise in implementation.
Courts: Review of labor decisions on appeal; injunctions are rare but possible in special cases.

Bottom Line

Call things by their right names: “Force leave” = Art. 301 temporary suspension; Art. 298 = permanent authorized-cause termination.
Six months is the legal fuse for floating status. Letting it burn out without recall or proper Art. 298 action risks illegal dismissal.
Due process and documentation—dual notices, fair criteria, clean computations—decide who wins the dispute.
Plan early, decide decisively: Float only when truly temporary; otherwise, move to authorized-cause termination with lawful separation pay.

This article is for general information and does not replace tailored legal advice. For case-specific strategy, consult a Philippine labor lawyer or your local PAO/IBP/DOLE office.