A Philippine legal article for HR, employers, managers, and employees

1) The big picture: what the law is protecting

Philippine labor law is anchored on security of tenure (1987 Constitution, Art. XIII, Sec. 3). In practice, this means:

An employee cannot be removed or effectively forced out except for a lawful cause and with due process.
Employer actions that look “temporary” (suspension, off-detail, “floating,” forced leave) can still become illegal if they function as dismissal or are imposed without proper basis or procedure.

This article covers three closely related tools often confused with each other:

Suspension as a disciplinary penalty (punitive suspension)
Preventive suspension (temporary removal pending investigation)
Floating status / temporary layoff / off-detail (no work assignment due to business conditions)

2) Key definitions and distinctions (most common source of mistakes)

A. Disciplinary suspension (penalty)

What it is: A punishment imposed after finding the employee liable for a workplace offense.
When it happens: After investigation and due process.
Pay status: Usually without pay (unless company policy/CBA says otherwise), applying the “no work, no pay” principle.
Limit: No fixed statutory maximum for private sector punitive suspension, but it must be reasonable, proportionate, and time-bounded. Excessive suspension can be attacked as constructive dismissal or unfair labor practice in some contexts.

B. Preventive suspension (not a penalty)

What it is: A temporary measure to protect people, property, evidence, or the workplace while an investigation is ongoing.
When it happens: During investigation—before a final finding of guilt.
Legal standard: It must be necessary (e.g., risk of tampering, intimidation of witnesses, violence, serious threat).
Maximum period (private sector doctrine): Commonly treated as up to 30 days. If the employer needs more time, the employer should generally reinstate the employee or pay wages beyond the allowable preventive suspension period, depending on the governing rules/policy and the circumstances recognized in jurisprudence and implementing rules practice.
Pay status: Generally unpaid during the allowed period (again applying “no work, no pay”), but improper or extended preventive suspension creates wage exposure.

C. Floating status / temporary layoff / off-detail (business-related non-assignment)

What it is: A temporary situation where the employee remains employed but is not given work due to a bona fide suspension of operations, lack of client assignment, reduction of work, or similar business conditions.
Not disciplinary: It is not supposed to be used to punish an employee.
Pay status: Typically no pay if no work is performed, unless the employer is at fault or the arrangement is effectively a disguised dismissal.
Critical time limit: The Labor Code allows a bona fide suspension of business or undertaking for up to six (6) months (Labor Code Art. 301 [formerly Art. 286]).
- If the employee is not recalled within 6 months, it generally becomes constructive dismissal.
- Within the 6 months, the employer should be able to show good faith and a real business basis.

Security industry note: “Floating status” is especially common for security guards due to client contracts. Philippine jurisprudence treats legitimate “off-detail” similarly: it must be bona fide, time-bounded, and not used to evade rights.

3) Due process in Philippine employment law (the backbone)

A. Two dimensions: substantive and procedural

To uphold a suspension, an employer must satisfy:

Substantive due process: There must be a lawful and factual basis (just cause, authorized cause, or legitimate business reason depending on the action).
Procedural due process: The correct steps and notices must be observed.

Failing substantive due process can make the action illegal (e.g., illegal dismissal, illegal suspension, constructive dismissal). Failing procedural due process can create liability even if the cause was valid (often nominal damages in dismissal cases under leading Supreme Court rulings such as Agabon and Jaka, depending on the scenario).

B. Due process for discipline and just-cause termination (private sector)

The well-known standard is the twin-notice rule and an opportunity to be heard (often associated with King of Kings Transport v. Mamac and related cases):

First written notice (Notice to Explain / NTE):
- Specific acts/omissions complained of
- Rule/policy violated (if applicable)
- Directive to submit a written explanation within a reasonable period (commonly at least 5 calendar days in many HR practices, but context matters)
Opportunity to be heard:
- Not always a full trial-type hearing
- But the employee must have a meaningful chance to respond, present evidence, and explain
Second written notice (Notice of Decision):
- Clear finding of facts
- Basis for liability
- Penalty imposed (e.g., suspension for X days) or termination

Important: Suspension as a penalty should come only after these steps (except preventive suspension, discussed next).

4) Preventive suspension in detail (how to do it legally)

A. When preventive suspension is justified

Preventive suspension is generally defensible when the employee’s continued presence poses a serious and imminent risk such as:

Threat of violence or harm to persons
Threat to company property or assets
Risk of evidence tampering
Risk of retaliation/intimidation of witnesses
Risk of repeating an alleged serious offense (e.g., fraud access)

It should not be used as:

A shortcut penalty (“suspend now, investigate later”)
A pressure tactic to force resignation
A way to avoid paying wages while “thinking” about what to do
A substitute for the 6-month temporary layoff rule (different concept)

B. Core rules and best practices

A defensible preventive suspension typically includes:

Written order stating it is preventive, not punitive
Specific grounds: why the employee’s presence is a risk
Defined period: start and end date
Parallel investigation timeline: show the investigation is moving

C. Duration risk

If preventive suspension is unreasonably long or not supported by necessity, it may be challenged as:

Illegal suspension (with possible backwages for the period)
Constructive dismissal if the effect is to force the employee out or deprive them of work indefinitely

5) Disciplinary suspension (penalty): legality checklist

A. Is the offense punishable by suspension?

The employer should point to:

Company code of conduct / handbook
HR policies
Employment contract terms
CBA provisions (if unionized)

Even without a handbook, employers can discipline for serious misconduct, but written rules help prove consistency and proportionality.

B. Proportionality matters

A penalty must be commensurate to the infraction. Factors often considered in disputes include:

Gravity of the act
Past offenses (record)
Position of trust (e.g., cashier, finance, HR, management)
Damage or risk caused
Intent
Consistency with how others were treated (avoid discrimination)

An overly harsh suspension (or serial suspensions) can be attacked as bad faith or constructive dismissal.

C. Pay and benefits during disciplinary suspension

Default: no work, no pay.
But check:
- CBA or company policy granting paid suspension
- Whether the employer’s process was defective (creating wage exposure)
- Whether the suspension is later found illegal (possible backwages)

6) Floating status / temporary layoff (Art. 301 / former Art. 286): the 6-month rule

A. Legal foundation

Labor Code Art. 301 [formerly Art. 286] permits a bona fide suspension of business or undertaking not exceeding six (6) months. During this period, the employer-employee relationship is not terminated.

B. What makes floating status legitimate

To be legitimate, the employer should be able to show:

A genuine business reason:
- Temporary suspension of operations
- Lack of available work assignments
- Client contract ended (common in service contracting/security)
- Short-term downturn or retooling/repairs
Good faith:
- Not targeting a particular employee for retaliation
- Not used to avoid due process for a disciplinary case
A real plan or effort to recall/reassign:
- Documented efforts, possible reassignments, offers, notices

C. The 6-month deadline is a cliff

General rule: No recall within six months → constructive dismissal.

At the end of the period, the employer must generally choose one:

Recall/reassign the employee to available work; or
Lawfully terminate if an authorized cause applies (e.g., retrenchment, redundancy, closure not due to serious losses) with the correct notices and separation pay rules; or
If closure is permanent or business realities require it, follow authorized cause procedures.

D. Employee refusal of reassignment

If the employer offers a reasonable, lawful reassignment and the employee unjustifiably refuses, the dispute may shift toward:

insubordination/refusal to work
possible abandonment (though abandonment requires clear intent to sever employment, not just absence)

But the offer must be legitimate:

similar role/pay (or with lawful basis for changes)
reasonable location and conditions
not a demotion or disguised penalty

E. Pay and benefits during floating status

Typically no pay if no work is performed.
But if the “floating” is a sham (e.g., there is work but employee is singled out), the employee may claim:
- backwages
- constructive dismissal
- damages in some circumstances

Social insurance contributions typically track actual compensation. With no salary paid, contributions may not accrue unless there is a paid arrangement; employees sometimes explore voluntary coverage where applicable.

7) Due process when the employer decides to terminate instead (authorized causes)

If the employer moves from “floating” to termination due to business reasons, authorized cause rules may apply (Labor Code provisions commonly cited as Art. 298 [formerly 283] and Art. 299 [formerly 284], depending on the cause). Key points:

Two notices are typically required:
1. Notice to the employee
2. Notice to DOLE
Timing: commonly 30 days prior (depending on the authorized cause framework)
Separation pay rules vary by cause (retrenchment, redundancy, closure, disease, etc.)

Using floating status to avoid the notice/separation pay framework is a common litigation trigger.

8) Constructive dismissal: where suspension/floating becomes “termination”

Constructive dismissal happens when the employer’s acts make continued employment impossible, unreasonable, or unlikely, or when there is:

Demotion in rank or diminution of pay/benefits
Humiliation or discrimination
Indefinite suspension without valid basis
“Floating” beyond 6 months without recall or lawful termination
Coercive pressure to resign

In constructive dismissal cases, the employer’s “it’s not termination” label usually won’t save the action if the effect is termination.

9) Burden of proof and evidence (what wins cases)

In disputes involving suspension and dismissal:

The employer generally bears the burden to prove:
- the factual basis of the charge/business condition
- compliance with due process
- proportionality of penalty
- good faith in floating status and adherence to the 6-month rule

Documents that matter:

NTE, employee explanation, minutes of conference/hearing
Preventive suspension order with reasons
Notices of decision with findings
Assignment offers/recall notices for floating employees
Client contract termination letters, project end notices
Organizational charts, manpower requests, staffing plans
DOLE notices (authorized causes) where applicable
Timekeeping/payroll proof for wage disputes

10) Remedies and liabilities (employee options; employer exposure)

A. If suspension is illegal or procedurally defective

Possible outcomes include:

Payment of wages for the illegal suspension period
Reinstatement to work (if still ongoing)
Damages in bad faith cases (fact-specific)

B. If floating status becomes constructive dismissal

Potential remedies:

Reinstatement without loss of seniority rights or separation pay in lieu of reinstatement (depending on feasibility), plus
Backwages (typical in illegal dismissal findings), and possibly
Attorney’s fees (common in labor awards), and
Damages where warranted by bad faith

C. If termination is valid but procedure is defective

In many Supreme Court frameworks, employers may still be ordered to pay nominal damages for violation of procedural due process (dismissal contexts), even if the cause was valid.

11) Special contexts you should not mix up

A. Private sector vs. government employment

Government employees are governed primarily by Civil Service rules, where “preventive suspension” and administrative due process operate under different standards, timelines, and penalties. Do not assume private-sector twin-notice rules apply identically in the public sector.

B. Service contracting / security guards

Floating status is common, but still constrained by:

good faith
legitimate lack of assignment
the 6-month limitation principle (as developed in labor doctrine and jurisprudence)

C. Criminal cases parallel to administrative cases

An employer may generally conduct an internal administrative investigation even if a criminal case exists, because workplace discipline uses a different standard of proof and purpose.

12) Practical compliance guides

A. Employer compliance checklist (disciplinary suspension)

Define the rule violated and evidence
Issue NTE with specifics
Give real opportunity to respond
Evaluate explanation fairly
Issue written decision stating facts, rule, penalty, and effectivity
Ensure penalty is proportionate and consistent with past practice
Keep complete records

B. Employer compliance checklist (preventive suspension)

Confirm necessity (risk-based)
Put it in writing with reasons
Keep it time-bounded
Actively investigate during the period
Avoid extending beyond defensible limits; if delayed, reinstate or adopt a legally safe approach consistent with governing rules and jurisprudence

C. Employer compliance checklist (floating status)

Confirm it is truly business-driven
Document the operational/client/work shortage basis
Provide written notice to the employee explaining status
Track the 6-month deadline
Document recall efforts and assignment offers
Before the deadline: recall, or proceed with lawful authorized-cause termination if appropriate

D. Employee checklist (protect your rights)

Ask for written notices (NTE, suspension order, status notice)
Submit a clear written explanation/position paper on time
Keep copies of schedules, payslips, messages, assignment offers, and refusals (with reasons)
If floating: track the date you were first placed on no-assignment and count toward 6 months
If you suspect constructive dismissal: document circumstances and consult counsel/seek assistance promptly

13) Common myths (and the correct rule)

“Preventive suspension is automatic for any accusation.” Not true. It must be necessary to protect the workplace or investigation.
“We can float an employee indefinitely as long as we say they’re still employed.” Not true. The Labor Code framework recognizes a 6-month maximum for bona fide temporary suspension of operations/undertaking; beyond that, it typically becomes constructive dismissal unless resolved through lawful separation/recall.
“A hearing is always required like a court trial.” Not always. What’s required is a meaningful opportunity to be heard, not necessarily a formal trial.
“Suspension doesn’t require due process because it’s not termination.” Still risky. Suspensions (especially lengthy ones) implicate the right to livelihood and can be attacked if imposed without fair process or lawful basis.

14) A simple timeline example (private sector)

Day 1: NTE issued (alleged serious misconduct) + possible preventive suspension order (if justified) Day 1–5+: Employee submits explanation Day 6–15: Administrative conference / evaluation of evidence Day 16–30: Decision issued (no liability / penalty suspension / termination if warranted) If floating status: Separate business notices apply; track the 6-month deadline from first day of non-assignment.

15) Bottom line principles

Label is not controlling—courts look at effect and fairness.
Preventive suspension must be necessary and time-bounded.
Disciplinary suspension must follow just-cause due process and be proportionate.
Floating status must be bona fide, in good faith, and generally cannot exceed six months without recall or lawful termination steps.
Documentation and consistent practice are often the difference between a defensible HR action and a costly labor case.

If you want, I can also provide:

a sample preventive suspension order template,
a model NTE + decision memo set, and
a floating status notice with a 6-month compliance tracker (dates and checkpoints).