As a general rule, an employment agency cannot keep an employee on floating status for more than six months. Before the six-month period expires, the agency must either give the employee a genuine work assignment or lawfully terminate the employment based on a valid ground and with the required notice and separation pay. If the agency simply leaves the employee without work and salary beyond six months, the situation will ordinarily amount to constructive dismissal.

The rule commonly applies to employees of manpower agencies, service contractors, security agencies, janitorial contractors, and similar businesses whose workers are assigned to clients. However, the exact result depends on why the employee was placed on floating status, whether a real reassignment was offered, and whether a limited emergency-related extension legally applies.

What Is Floating Status?

“Floating status,” also called temporary layoff, forced leave, reserved status, or temporary off-detail, means that:

The employee remains employed by the agency.
The employee temporarily performs no work.
The agency does not yet permanently terminate the employee.
The employee usually receives no salary under the “no work, no pay” principle.
The agency is expected to recall or reassign the employee within the legally permitted period.

Floating status is common when a client ends its service contract with an agency or requests the removal of a particular worker. For example, a security guard may be relieved from a mall assignment while the security agency looks for another available post.

Being removed from one client does not automatically mean that the employee has resigned or that the employment relationship has ended. The worker generally remains an employee of the agency, not merely an employee of the particular client account.

The Six-Month Rule Under the Labor Code

Article 301 of the Labor Code, formerly Article 286, allows a bona fide—meaning genuine and made in good faith—suspension of business operations for a period not exceeding six months.

The law provides that a bona fide suspension of the operation of a business or undertaking for not more than six months does not terminate employment. The Supreme Court has applied this provision by analogy to employees who are temporarily laid off or placed on floating status because no assignment is immediately available. See the Labor Code of the Philippines. (LawPhil)

For the floating status to be valid, the agency should be able to establish that:

There was a genuine business reason for temporarily removing the employee from active work.
The suspension was not intended to defeat the employee’s security of tenure.
The agency did not have an available and appropriate assignment that it was deliberately withholding from the employee.
The temporary layoff did not exceed the allowable period.
The agency acted in good faith and made reasonable efforts to recall or redeploy the employee.

The employer bears the burden of proving the factual basis for the floating status. A bare statement that there were “no available accounts” may not be enough if payroll records, deployment lists, new hiring records, or client contracts show that positions were actually available.

In Lopez v. Irvine Construction Corporation, the Supreme Court ruled that an employer must prove a clear and compelling economic reason for temporarily laying off employees. In Airborne Maintenance and Allied Services, Inc. v. Egos, the Court reiterated that employees cannot remain temporarily laid off indefinitely: after six months, they must be recalled or validly retrenched. (LawPhil)

What Must the Agency Do Before Six Months Expires?

Before the six-month limit is reached, the agency must generally choose one of two lawful courses.

1. Give the employee a genuine work assignment

The agency may recall the employee and assign them to another client, branch, worksite, or account, provided that the reassignment is lawful and reasonable.

A proper reassignment should normally identify:

The client or establishment;
The work location;
The position and duties;
The reporting date and time;
The applicable salary or wage rate;
The person or office to whom the employee must report; and
Any legitimate documentation or deployment requirements.

The employee should not ignore a valid recall notice. Refusing a genuine and reasonable assignment may affect an illegal dismissal claim, especially if the agency can prove that it offered the assignment within the allowable period.

2. Lawfully terminate the employment

When no assignment is available and the legal requirements for an authorized cause are present, the agency may terminate the employee rather than keep the employee waiting indefinitely.

Depending on the facts, the agency may rely on an authorized cause such as retrenchment, redundancy, closure, or cessation of operations under Article 298 of the Labor Code. The agency must prove the authorized cause and comply with procedural requirements, which ordinarily include:

Written notice to the employee;
Written notice to the appropriate Department of Labor and Employment office at least one month before the intended termination; and
Payment of the legally required separation pay.

The amount of separation pay depends on the authorized cause. In retrenchment or closure not caused by serious business losses, the statutory minimum is generally one month’s pay or one-half month’s pay for every year of service, whichever is higher. A fraction of at least six months is ordinarily treated as one whole year.

An agency cannot avoid these obligations by simply extending floating status “until further notice.”

Can Floating Status Ever Be Extended Beyond Six Months?

There is a narrow exception under DOLE Department Order No. 215-20 for a declaration of war, pandemic, or a similar national emergency.

Under that rule, an employer and its employees may agree to extend the suspension of employment for another period not exceeding six months. However, the extension is subject to significant conditions:

A qualifying war, pandemic, or similar national emergency must exist.
The employer and employees must meet in good faith.
The agreement should be made through the union, if there is one, or with DOLE assistance.
The employer must report the extension to the DOLE Regional Office at least 10 days before it takes effect.
Employees may obtain alternative employment during the extended period without automatically losing their original employment, unless they submit a written, unequivocal, and voluntary resignation.
The extension does not remove the employee’s right to separation pay if retrenchment later becomes necessary.

The Supreme Court discussed these requirements in Polintan v. Malabanan. The Court found constructive dismissal where the employee remained on floating status beyond the allowable period without proof of a valid extension agreement and DOLE reporting. The full decision is available through the Supreme Court E-Library. (Supreme Court E-Library)

Department Order No. 215-20 is not a general permission for agencies to extend floating status whenever business is slow. An agency cannot merely announce that the employee’s floating status has been extended for another six months. The exceptional requirements must be satisfied.

Special Rules for Security Guards and Other Private Security Personnel

Security guards are frequently placed on temporary off-detail when a client requests their relief or when a security service contract ends. The employment conditions of private security personnel are also governed by DOLE Department Order No. 150-16.

A security agency may generally transfer a guard from one client to another as part of its management prerogative. A guard normally has no permanent right to remain at one particular post. However, the agency must not use reassignment or floating status as a disguised method of dismissal.

The Supreme Court has consistently held that:

The agency must try to assign the guard to another available post.
The agency bears the burden of proving that no post was available.
Floating status without salary must not ordinarily exceed six months.
A guard who remains unassigned beyond six months may be considered constructively dismissed.
A reassignment must be genuine and specific.

A vague instruction telling a guard to “report to the office” may not be enough. In cases involving security personnel, the Supreme Court has explained that a valid recall generally requires assignment to a specific client or post. However, a guard who refuses a valid and specific reassignment offered within the proper period may not successfully claim that the agency failed to recall them. (Supreme Court E-Library)

The Supreme Court summarized the agency’s obligations in cases such as Exocet Security and Allied Services Corporation v. Serrano, Quillopa v. Quality Guards Services Investigation Agency, and Soliman Security Services, Inc. v. Court of Appeals. (LawPhil)

Does the Same Rule Apply to Manpower and Service Agency Employees?

Yes. Employees of janitorial, maintenance, logistics, promotional, technical, and other service contractors may also be placed on floating status only under legally defensible circumstances and within the applicable time limit.

Under DOLE Department Order No. 174-17, a legitimate contractor is generally considered the employer of the workers it deploys. The end of one client service agreement does not automatically erase the contractor’s employment relationship with its regular employees. The contractor must consider reassignment, lawful termination, or another arrangement permitted by law.

The official DOLE information on contractor registration is available through the Bureau of Local Employment’s contractor registration page. (Dole Bureau of Labor Relations)

If the agency is engaged in prohibited labor-only contracting, the client or principal may be treated as the worker’s direct employer. Labor-only contracting may exist when the contractor lacks an independent business or substantial capital, or when the principal—not the agency—actually controls how the employee performs the work.

Because this issue depends heavily on evidence, an employee who is unsure which company is the true employer may identify both the agency and the principal in the initial labor complaint. The labor authorities can then determine the actual employment relationship and the possible liability of each company. (LawPhil)

When Does Floating Status Become Constructive Dismissal?

Constructive dismissal occurs when an employee has not been formally fired but the employer’s actions effectively end or make continued employment impossible, unreasonable, or unlikely.

Floating status may become constructive dismissal when:

It continues beyond six months without a valid emergency extension;
The stated reason for the floating status is false or unsupported;
Other employees are hired or deployed while the affected employee remains unassigned;
The agency has available posts but deliberately refuses to assign the employee;
The agency repeatedly promises reassignment without giving a definite post;
The employee is pressured to sign a resignation or quitclaim;
The employee is required to wait indefinitely without salary; or
The agency issues only a sham or impossible recall order to create the appearance of compliance.

Once constructive dismissal is established, the agency must prove that the dismissal was based on a valid just or authorized cause and that proper procedure was followed.

What Can an Illegally Dismissed Employee Recover?

The possible remedies depend on the evidence and the final ruling of the Labor Arbiter.

Possible remedy	What it means
Reinstatement	Return to employment without loss of seniority rights
Full backwages	Salary, allowances, and qualifying benefits lost because of the illegal dismissal
Separation pay instead of reinstatement	Commonly awarded when reinstatement is no longer practical or relations have become severely strained
Unpaid benefits	Claims may include unpaid wages, holiday pay, overtime pay, service incentive leave, or 13th-month pay when supported by records
Attorney’s fees	May be awarded when the employee was compelled to litigate to protect lawful wages or benefits
Damages	Moral or exemplary damages may be awarded when dismissal was carried out in bad faith, fraudulently, oppressively, or contrary to public policy

These remedies are not automatically awarded in every floating-status case. The Labor Arbiter will examine when the dismissal legally occurred, whether an assignment was offered, whether the employee remained willing to work, and whether the agency proved a valid business reason.

How to Count the Six-Month Period

The period normally begins on the date the employee was actually removed from active work or when the floating-status notice took effect.

For example:

Last active workday: January 15
Floating status begins: January 16
Six-month limit ordinarily ends: around July 15

The exact computation should be based on the documents and the factual timeline.

An agency generally cannot restart the period by issuing another floating-status memorandum. A token return to work, a one-day assignment, or a paper-only deployment intended merely to reset the clock may be challenged as bad faith.

On the other hand, a genuine assignment that restores the employee to real, paid work may legally end the floating period. If the employee is later removed again for a separate and legitimate reason, the new situation will be assessed according to its own facts.

What an Employee Should Do While on Floating Status

1. Obtain written confirmation

Ask the agency for a written notice stating:

The effective date of floating status;
The reason for the temporary layoff;
Whether employment remains active;
The expected duration;
The process for reassignment; and
The contact person responsible for deployment.

If the agency refuses to issue a written notice, preserve messages, screenshots, attendance records, and the names of people who communicated the decision.

2. State in writing that you remain willing to work

Send a letter, email, or verifiable message confirming that you are ready and willing to accept a lawful assignment.

This helps counter a later claim that you abandoned your job. Abandonment requires a clear and deliberate intention to sever employment; failure to follow up constantly does not automatically prove abandonment.

3. Follow up periodically

Ask for reassignment at reasonable intervals. Keep copies of:

Emails;
Text messages;
Messaging-app conversations;
Letters received by the agency;
Visitor logs;
Call records; and
Names and positions of people contacted.

4. Carefully review any assignment offered

Check whether the offer identifies a real client, location, position, salary, and reporting date.

Report as instructed unless the assignment is unlawful, clearly impossible, materially demoting, dangerous without justification, or designed to force resignation. If there is a legitimate concern, communicate it immediately in writing rather than simply refusing to report.

5. Do not sign documents without reading them

Be cautious with documents labeled as:

Voluntary resignation;
Quitclaim;
Waiver;
Clearance;
End-of-contract acknowledgment;
Deed of release; or
Request for extended floating status.

A document may later be used to argue that you voluntarily resigned or accepted the arrangement. Request a copy before or immediately after signing.

6. File a Request for Assistance through SEnA

The Single Entry Approach, or SEnA, is DOLE’s mandatory conciliation-mediation process for many labor disputes. An employee may file a Request for Assistance at the appropriate DOLE Regional, Provincial, or Field Office or through available DOLE electronic services.

SEnA proceedings are designed to run for approximately 30 days, during which a SEnA Desk Officer helps the parties explore settlement. The process covers termination and suspension-of-employment disputes. (Dole Philippines)

7. Proceed to the NLRC if the dispute is not settled

If conciliation fails, an employee may file an illegal dismissal complaint before the Arbitration Branch of the National Labor Relations Commission with jurisdiction over the workplace or other proper venue under the NLRC Rules.

The usual stages include:

Filing of the complaint;
Mandatory conferences;
Submission of position papers and evidence;
Decision by the Labor Arbiter;
Appeal to the NLRC, when legally available; and
Possible judicial review before the Court of Appeals and Supreme Court.

Documents That Can Strengthen a Floating-Status Case

Document or evidence	Why it matters
Employment contract	Shows the agency, position, salary, status, and employment terms
Company ID and payslips	Helps prove employment and compensation
Deployment or assignment orders	Identifies previous clients, posts, and assignments
Floating-status memorandum	Establishes the official starting date and stated reason
Relief or pullout order	Shows when and why the employee was removed
Messages requesting reassignment	Proves continued willingness to work
Recall or return-to-work notices	Shows whether a genuine assignment was offered
Proof of receipt	Establishes when notices were sent or received
Payroll and contribution records	Helps establish periods of work and lost compensation
Names of newly hired or deployed employees	May challenge the claim that no positions were available
Client communications	May show whether the client requested relief or whether the agency made the decision
Resignation, quitclaim, or waiver documents	Allows examination of whether consent was genuine and voluntary

Notarization is not required for every internal letter or message. However, affidavits submitted as evidence in formal proceedings may need to be sworn before an authorized officer or notary, depending on the applicable procedure.

Common Problems in Floating-Status Cases

The client ended its contract with the agency

The loss of one client account may justify temporary redeployment efforts, but it does not automatically end every affected worker’s employment. The agency must still observe the six-month limit and the legal requirements for termination.

The client requested the employee’s removal

A client may ask that a worker be removed from its premises, but the agency should investigate and determine whether reassignment is available. A client’s preference does not automatically constitute a valid ground for dismissal.

The agency says the employee is “on call”

An indefinite on-call arrangement without work and pay may still be floating status. Labels do not control. Labor authorities examine what actually happened.

The agency issued a recall shortly before six months expired

The employee should determine whether the recall identifies a genuine assignment. For security guards, a general instruction to visit the agency office may not be equivalent to deployment to a specific post. Nevertheless, the employee should report or respond in writing so the agency cannot easily claim refusal or abandonment.

The employee found temporary work elsewhere

Taking temporary alternative work does not necessarily prove resignation from the agency, particularly during an extended suspension covered by Department Order No. 215-20. A written, voluntary, and unequivocal resignation is different from accepting temporary work to survive while receiving no salary.

The agency asks the employee to sign a new probationary contract

A regular employee does not normally become probationary again merely because of reassignment to another client. Requiring a new probationary contract may be evidence that the agency is trying to erase prior service or avoid security-of-tenure obligations.

The principal says only the agency can be sued

The agency is usually the direct employer in legitimate contracting, but the principal may also be implicated when there is labor-only contracting, direct control, or statutory solidary liability. The correct parties depend on how the arrangement actually operated, not merely on the labels in the service contract.

The worker is a foreign national

Philippine labor protections generally apply to foreign employees working under an employment relationship in the Philippines. Immigration status, an Alien Employment Permit, and the governing contract may create additional issues, but they do not automatically eliminate protection against illegal dismissal.

Employees recruited for overseas work may be governed by a different contractual and regulatory framework involving the Department of Migrant Workers and licensed recruitment agencies. A dispute involving an overseas employment contract should not automatically be treated as an ordinary local manpower-agency case.

Time Limits for Filing a Case

An illegal dismissal complaint generally prescribes four years from the date the cause of action accrued under Article 1146 of the Civil Code. Separate claims for unpaid wages and other monetary benefits are generally subject to the three-year period under the Labor Code. (LawPhil)

Employees should not wait for these periods to almost expire. Delay can lead to lost messages, unavailable witnesses, discarded payroll records, and disputes over the exact date the floating status began.

Frequently Asked Questions

Can an agency legally put me on floating status for six months?

Yes, but only when there is a genuine and temporary business reason. The agency must act in good faith, and the arrangement must not be used to defeat your right to security of tenure.

What happens if my floating status reaches exactly six months?

Before the allowable period ends, the agency should recall you to genuine paid work or lawfully terminate your employment. It cannot ordinarily leave you floating indefinitely.

Am I automatically illegally dismissed on the first day after six months?

Floating status beyond the lawful period ordinarily supports a finding of constructive dismissal. However, the final result may depend on whether a valid assignment was offered, whether an emergency extension existed, and whether you refused a lawful recall.

Do I receive salary while on floating status?

Usually not, because no work is being performed. Salary may still be due if a company policy, collective bargaining agreement, employment contract, or special arrangement provides otherwise.

Can the agency extend my floating status if I agree?

An employee’s agreement alone does not automatically make an extension valid. An extension beyond six months is generally allowed only under the exceptional conditions of Department Order No. 215-20 involving war, pandemic, or a similar national emergency, good-faith agreement, and DOLE reporting.

Can I resign while on floating status?

Yes. A resignation should be voluntary, clear, and in writing. However, resignation may affect possible claims for reinstatement and separation pay, so the circumstances and wording should be considered carefully.

Can I work for another company while waiting?

Taking another job may affect availability for recall and may raise contractual issues. Under the emergency-extension rules of Department Order No. 215-20, alternative employment does not automatically terminate the original employment unless there is a written and voluntary resignation. Outside that situation, the facts and employment contract should be reviewed carefully.

What if I refuse reassignment because the workplace is far away?

The legality of the refusal depends on the distance, transportation burden, employment contract, past assignments, salary, safety, and whether the transfer is unreasonable, discriminatory, or demoting. State your concerns in writing and propose a practical alternative rather than ignoring the order.

Does a return-to-work letter automatically defeat my case?

No. Labor authorities examine whether the notice was genuine, timely, properly received, and connected to an actual assignment. However, failing to respond to a legitimate recall may seriously weaken the employee’s position.

Can I file a case even if the agency never issued a termination letter?

Yes. Constructive dismissal does not require a formal termination letter. The employer’s conduct—including keeping an employee without work and salary beyond the lawful period—may effectively terminate employment.

Key Takeaways

An agency may place an employee on floating status only for a genuine, temporary, and good-faith reason.
The ordinary maximum period is six months.
Before the period expires, the agency must provide genuine work or complete a lawful termination process.
A limited extension may apply during war, a pandemic, or a similar national emergency, but only when the requirements of DOLE Department Order No. 215-20 are met.
Security agencies must offer guards a real and specific posting; a vague order to report to the office may not be sufficient.
Employees should remain responsive, express their willingness to work, and preserve all notices and communications.
Floating status beyond the lawful period may constitute constructive dismissal, potentially resulting in reinstatement, backwages, separation pay in lieu of reinstatement, and other appropriate monetary awards.