In Philippine labor law, “floating status” (also called “off-detail,” “temporary lay-off,” or “temporary suspension of work”) refers to a situation where an employee is temporarily without assignment or work but remains employed by the company. This practice is most common in manpower agencies, security services, janitorial services, and project-based or seasonal industries, but it can also occur in regular private-sector employment when there is a bona fide temporary cessation or reduction of operations.

The central question many employees and employers ask is: Can an employer legally place a worker on floating status without prior notice? The short answer, based on the Labor Code, DOLE issuances, and consistent Supreme Court rulings, is yes — floating status itself is legal even without formal prior notice, provided it is temporary, justified, and does not exceed six (6) months. However, the absence of notice significantly increases the risk that the action will be declared constructive dismissal or illegal dismissal if challenged.

Below is a comprehensive discussion of the law, jurisprudence, and practical implications as of 2025.

1. Legal Basis for Floating Status

The primary legal foundation is Article 301 [formerly Article 286] of the Labor Code:

“When employment not deemed terminated. — The bona-fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such 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.”

The Supreme Court has repeatedly ruled that temporary suspension of work or lack of assignment due to business circumstances (lack of clients, temporary closure, reorganization, etc.) falls under this provision. Notable cases:

Agro Commercial Security Services Agency, Inc. v. NLRC (G.R. No. 82823, July 31, 1989)
Established that security guards placed “off-detail” are on temporary floating status, not dismissed.
Mobile Protective & Detective Agency v. Ompad (G.R. No. 159195, May 9, 2005)
Floating status is lawful when there is no available post, provided it is temporary.
Nationwide Security and Allied Services, Inc. v. Valderama (G.R. No. 186614, February 23, 2011)
Reiterated the six-month maximum rule.

2. Is Prior Notice Required?

The Labor Code does not explicitly require prior written notice for placing an employee on bona fide temporary floating status (unlike retrenchment, redundancy, or closure under Article 298, which requires 30-day written notice to both employee and DOLE).

However, the Supreme Court and DOLE have consistently emphasized the following:

The employer must act in good faith. Lack of any communication can be taken as evidence of bad faith or intent to dismiss.
In JPL Marketing Promotions v. CA (G.R. No. 151966, July 8, 2005), the Court said that placing employees on floating status without informing them of the reason and expected duration is indicative of constructive dismissal.
In Exodus Security Agency v. Genelyn B. Basan (G.R. No. 208490, March 12, 2018), the Court ruled that prolonged floating status combined with failure to communicate amounts to dismissal without just cause.
DOLE Department Order No. 174-17 (Rules on Contracting) and Labor Advisory No. 09-20 (COVID-era, later made part of standard practice) strongly recommend written notice informing the employee of the floating status, the reason, and the estimated duration.

Practical rule in 2025: While not strictly illegal to impose floating status without notice, doing so is extremely risky. Courts almost always rule in favor of the employee when there is no written communication, treating the silence as constructive dismissal.

3. Maximum Duration: The Six-Month Rule

The Supreme Court has been consistent since the 1990s:

Floating status must not exceed six (6) months.
Beyond six months, it is presumed to be constructive dismissal unless the employer proves extraordinary circumstances (e.g., prolonged litigation preventing resumption, force majeure lasting longer).

Key rulings:

Sebuguero v. NLRC (G.R. No. 115394, September 27, 1995) – Six months is the maximum.
Superstar Security Agency v. NLRC (G.R. No. 81493, April 3, 1990)
Salvaloza v. NLRC (G.R. No. 182086, November 24, 2010)
Poseidon International Maritime Services, Inc. v. Tamala (G.R. No. 214345, June 19, 2019) – Even seafarers on “wait-list” status are covered by the six-month rule.

If the employee is not given work or recalled after six months, he/she may file for illegal/constructive dismissal and claim:

Reinstatement or separation pay (if reinstatement is no longer viable)
Full backwages from the date of constructive dismissal
Moral and exemplary damages (if bad faith is proven)
10% attorney’s fees

4. Employee Rights During Floating Status

The employee remains employed; the employer cannot hire replacements for the same position while the employee is floating.
“No work, no pay” applies — the employee is not entitled to salary during the period unless the collective bargaining agreement (CBA) or company policy provides otherwise.
The employee may seek temporary or even permanent employment elsewhere without being considered to have abandoned his/her original job (DOLE Explanatory Bulletin on Floating Status, 1997; reiterated in D.O. No. 174-17).
The employer must continue paying 13th-month pay (pro-rated if applicable) and other benefits that accrue regardless of work rendered (e.g., SIL conversion to cash if unused).
SSS, PhilHealth, and Pag-IBIG contributions must continue to be remitted by the employer based on the last salary received.

5. When Floating Status Becomes Illegal Even Within Six Months

If the employer hires new employees or assigns others to the same post while the original employee is floating.
If the reason given is false or pretextual (e.g., claiming no client when there actually is).
If the employee is singled out (discriminatory application).
If the employer refuses to accept the employee’s repeated offers to return to work.

6. Special Cases

Security guards, janitors, promo merchandisers under agencies: Floating status is inherent in the industry and tolerated longer in practice, but still capped at six months per Supreme Court doctrine.
Project employees: Floating status between projects is normal, but the gap must be reasonable and not used to circumvent regularisation.
Pandemic-era flexibility: DOLE allowed extended floating status during COVID-19 community quarantines (Labor Advisory No. 17-20, 14-20, etc.), but that flexibility has long expired. The six-month rule fully applies again in 2025.

Conclusion

Placing an employee on floating status without prior notice is not expressly prohibited by the Labor Code and is therefore technically legal if the suspension is bona fide, temporary, and does not exceed six months. However, the Supreme Court has made it crystal clear over three decades of jurisprudence that failure to communicate the reason and expected duration almost always results in a finding of constructive or illegal dismissal.

Best and safest practice for employers in 2025:
Always issue a written notice/memo stating:

The reason for the floating status (e.g., loss of client, temporary cessation of operations),
That it is temporary,
The estimated duration, and
That the employee will be recalled as soon as work becomes available.

Employees who receive no communication at all should immediately send a written inquiry or protest letter (via email with read receipt or registered mail) asking for clarification and expressing readiness to work. This preserves their right to claim constructive dismissal after six months.

Floating status is a legitimate management prerogative — but only when exercised in good faith and with transparency. Without those, it becomes illegal dismissal in the eyes of Philippine labor tribunals.