Security of tenure stands as one of the cornerstone protections in Philippine labor law, enshrined in the 1987 Constitution and the Labor Code of the Philippines. It guarantees workers, particularly those in regular employment, the right to continue in their jobs unless terminated for just or authorized causes and after observance of due process. Closely intertwined with this right is the concept of "floating status," a temporary arrangement often encountered in industries such as security services, construction, and other sectors with project-based or client-dependent operations. While floating status serves legitimate operational needs, its misuse can undermine security of tenure, leading to claims of constructive dismissal. This article comprehensively examines the legal foundations, definitions, limitations, rights, obligations, jurisprudence, and remedies surrounding these intertwined doctrines.

Constitutional and Statutory Foundations of Security of Tenure

The 1987 Philippine Constitution, under Article XIII, Section 3, declares it a state policy to afford full protection to labor and to guarantee security of tenure for workers. This constitutional mandate is implemented through the Labor Code of the Philippines (Presidential Decree No. 442, as amended).

Article 279 of the Labor Code explicitly provides:

"Security of tenure. — In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by law. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement."

This provision applies primarily to regular employees, defined under Article 280 as those engaged to perform activities usually necessary or desirable in the usual business or trade of the employer. Regular employees enjoy security of tenure regardless of the label in their employment contract. Probationary employees gain this protection once they become regular after the maximum six-month probationary period, unless a valid ground for non-regularization exists.

Security of tenure is not absolute. Termination is allowed for:

Just causes (Article 282, now renumbered in some compilations but substantively the same):

Serious misconduct or willful disobedience
Gross and habitual neglect of duties
Fraud or willful breach of trust
Commission of a crime or offense against the employer
Other analogous causes

Authorized causes (Articles 283-284):

Installation of labor-saving devices
Redundancy
Retrenchment to prevent losses
Closure or cessation of business
Disease incurable within six months

In authorized causes, the employer must serve written notice to the employee and the Department of Labor and Employment (DOLE) at least 30 days prior and pay separation pay equivalent to at least one month pay or one month pay for every year of service, whichever is higher.

Due process is mandatory in all cases. The Supreme Court has consistently required the "twin-notice rule": (1) a written notice specifying the grounds and giving the employee opportunity to explain, and (2) a second notice informing the employee of the decision to dismiss.

Definition and Nature of Floating Status

Floating status, sometimes called "temporary off-detail," "reserve status," or "on-call status," occurs when an employer places an employee in a temporary inactive position due to lack of assignment, project completion, or client contract termination, while maintaining the employment relationship. The employee remains on the payroll roster but performs no actual work and, in most cases, receives no salary during this period, following the "no work, no pay" principle.

This arrangement is most prevalent in:

Security agencies: When a security guard's post is lost because a client ends its contract, the agency places the guard on floating status pending reassignment to another client.
Construction firms: When a specific project ends and the worker awaits the next project.
Other service-oriented industries: Such as janitorial services, manpower agencies, or seasonal businesses.

Floating status is not a form of termination but a temporary measure. It does not automatically sever the employer-employee relationship. However, it must be grounded on valid business reasons and cannot be used to circumvent security of tenure.

Legal Limitations on Floating Status

Philippine jurisprudence has established clear boundaries to prevent abuse of floating status:

Maximum Duration of Six (6) Months
The Supreme Court has consistently ruled that floating status may not exceed six months. Beyond this period, the prolonged inaction by the employer is deemed a constructive dismissal. The six-month limit draws from the analogy to Article 286 (suspension of business operations) and the policy against indefinite employment limbo.
Duty to Reassign
In security services, the employer (agency) has the positive obligation to reassign the guard to a new post as soon as possible. Security of tenure attaches to the employment relationship with the agency, not to a specific client or post. The loss of a client does not justify permanent separation; the agency must exert reasonable efforts to find a new assignment.
Bona Fide Requirement
The placement on floating status must be made in good faith and for legitimate reasons (e.g., actual loss of contract, temporary business downturn). Bad-faith floating—used to harass, punish, or force resignation—constitutes constructive dismissal.
Applicability to Employee Classification
- Regular employees: Fully protected. Indefinite floating violates their security of tenure.
- Project employees: Their employment is coterminous with the project. Upon project completion, they are not placed on floating status; their employment simply ends, subject to separation pay if they qualify under repeated hiring rules that convert them to regular status.
- Probationary employees: Floating status during probation is rare and scrutinized; it cannot be used to extend probation beyond six months.
- Casual or seasonal employees: Limited protection; their tenure ends with the occasion or season.

Rights and Obligations During Floating Status

Employee Rights:

Continued employment status (not dismissed)
Entitlement to recall or reassignment within a reasonable time (not exceeding six months)
Preservation of seniority rights and other benefits accrued prior to floating
Right to file a complaint for constructive dismissal if the status becomes indefinite
Access to social security, PhilHealth, and Pag-IBIG contributions (employer must continue remitting where applicable, though practice varies)
Protection against discrimination or retaliation for refusing unreasonable reassignment

Employer Obligations:

Provide written notice explaining the reason for floating status and expected duration
Make genuine and timely efforts to secure new assignments
Comply with DOLE reporting requirements for security agencies (under relevant Department Orders governing private security agencies)
Avoid using floating status as a substitute for proper retrenchment or redundancy procedures, which require separation pay

Compensation During Floating Status: The general rule is "no work, no pay." Employees on floating status typically do not receive salary or allowances. However, if the employer requires the employee to remain available or report periodically (e.g., daily roll call), courts may find entitlement to some compensation. In security guard cases, agencies sometimes provide a nominal "waiting pay" or meal allowances, but these are not legally mandated unless stipulated in the employment contract or Collective Bargaining Agreement (CBA).

Interaction Between Floating Status and Security of Tenure

Floating status tests the boundaries of security of tenure. When properly implemented as a short-term operational necessity, it does not violate tenure rights. When abused—through prolonged duration, lack of reassignment efforts, or discriminatory application—it becomes constructive dismissal.

Constructive dismissal occurs when the employer’s actions make continued employment impossible, unreasonable, or unlikely, effectively forcing the employee to resign or remain in limbo. Prolonged floating status falls under this category because it deprives the employee of income and meaningful work while keeping them technically employed.

In security services, the Supreme Court has emphasized that guards are regular employees of the agency. Reassignment to a new post, even if less favorable (e.g., different location or shift), is generally part of the job unless it results in demotion in rank or significant diminution in benefits.

Key Jurisprudential Principles

Philippine courts have developed a consistent body of rulings:

The six-month limit on floating status is a bright-line rule applied strictly in security guard cases.
Failure to reassign within six months, absent valid justification (such as proven business losses requiring retrenchment), entitles the employee to reinstatement and full backwages.
Employers cannot evade liability by claiming repeated short floating periods that cumulatively exceed six months.
In cases involving economic difficulties, the employer must follow authorized cause procedures (notice + separation pay) rather than indefinite floating.
Collective Bargaining Agreements may provide enhanced protections, such as guaranteed pay during short floating periods or priority in reassignment.

Remedies for Violation of Rights

An employee illegally placed on prolonged floating status may file a complaint for illegal dismissal (constructive) before the Labor Arbiter of the National Labor Relations Commission (NLRC) within 30 days from the time the cause of action accrues (typically after the six-month period lapses without reassignment).

Available reliefs include:

Reinstatement to former position or equivalent, without loss of seniority
Full backwages from the time compensation was withheld
Separation pay in lieu of reinstatement (if strained relations or business closure)
Moral and exemplary damages when bad faith is proven
Attorney’s fees equivalent to 10% of the total monetary award
Other benefits under the law or CBA

Decisions of Labor Arbiters may be appealed to the NLRC, then to the Court of Appeals via Rule 65 petition, and ultimately to the Supreme Court.

Special Contexts and Contemporary Considerations

Pandemic and Force Majeure: During the COVID-19 pandemic, many employers placed workers on floating status due to lockdowns and business suspensions. The Department of Labor and Employment issued guidelines allowing temporary measures but still required observance of the six-month limit and good-faith efforts to resume operations. Employees could avail of government assistance programs like the COVID-19 Adjustment Measures Program (CAMP) or Small Business Wage Subsidy.

Security Services Industry: Governed by Republic Act No. 5487 (Private Security Agency Law) and successive DOLE Department Orders (e.g., DO 150-16), which impose stricter standards on agencies. Agencies must maintain a sufficient number of clients and posts; chronic inability to provide assignments may lead to revocation of licenses.

Globalization and Manpower Agencies: In labor-only contracting and job contracting arrangements (regulated by DOLE Department Order No. 174-17), the principal and contractor share liability. Security of tenure protections extend to the employees, and floating status cannot be used to shift responsibility between entities.

Gender and Vulnerable Workers: Special protections apply to women, persons with disabilities, and other vulnerable groups. Floating status that disproportionately affects them may invite additional discrimination claims under Republic Act No. 6725 or the Magna Carta for Women.

Preventive Measures and Best Practices

Employers can avoid liability by:

Maintaining accurate records of reassignment efforts
Issuing clear written notices for floating status with expected timelines
Exploring alternatives such as retrenchment with separation pay when long-term lack of work is anticipated
Entering into CBAs that provide clearer guidelines on floating status
Regularly reporting to DOLE as required for security agencies

Employees should:

Document all communications regarding floating status
Keep records of availability and willingness to work
Seek legal assistance promptly after six months of inactivity

The doctrines of floating status and security of tenure reflect the Labor Code’s policy of balancing employer operational flexibility with the worker’s right to stable employment and livelihood. Philippine law and jurisprudence vigilantly guard against arrangements that effectively erode this fundamental protection, ensuring that temporary measures do not become permanent instruments of injustice.