A Philippine-context legal article on temporary layoff/off-detail, its legal basis, limits, and compliance pitfalls.

1) What “floating status” means (and what it is not)

In Philippine labor practice, “floating status” is a colloquial term—most common in security, contracting, and manpower industries—referring to a temporary off-detail / temporary layoff where an employee remains employed but is not given work or assignment for a time.

It is not:

Dismissal (because the employment relationship is not immediately severed),
Preventive suspension (a disciplinary measure pending investigation, which has different rules and time limits), or
A lawful way to indefinitely keep an employee without work to pressure resignation.

In law, floating status is generally anchored on the Labor Code rule on bona fide suspension of business operations or undertaking, commonly treated as a temporary layoff.

2) Core legal basis: temporary layoff / bona fide suspension (Labor Code Article 301, formerly Article 286)

Philippine labor law recognizes that an employer may temporarily suspend work without terminating employment when there is a bona fide suspension of operations (or a genuine work stoppage or lack of work) for a period not exceeding six (6) months.

Key legal consequences:

During the temporary layoff, the employee is not deemed terminated.
The employee is generally entitled to reinstatement to the former position or a substantially equivalent one once operations resume or an assignment becomes available, without loss of seniority rights.
If the employee is not recalled/reinstated within six (6) months, the situation typically ripens into illegal dismissal/constructive dismissal, or the employee is deemed terminated, requiring the employer to justify the separation under authorized-cause rules.

This 6-month cap is the single most important boundary: floating status must be temporary and time-bounded.

3) Who can be placed on floating status

A. Regular employees (including directly hired regulars)

Yes—regular employees may be placed on floating status if the legal requirements for temporary layoff are present. Regularization does not eliminate management’s ability to implement a genuine temporary layoff, but security of tenure heightens scrutiny: the employer must show the floating status is not a disguised dismissal.

B. Security guards and agency/manpower employees

Floating status is most litigated here:

A guard remains a regular employee of the security agency, even if the client contract ends.
A manpower employee may be off-detail when a project ends, but the employer must show genuine lack of available placement and good-faith efforts to reassign.

4) Substantive requirements (what must be true for floating status to be lawful)

Floating status is lawful only when it is a good-faith, bona fide temporary layoff. Courts typically look for the following:

1) A genuine business reason / bona fide lack of work

Examples that may justify temporary layoff:

Loss or expiration of a client contract (common in security/manpower),
Temporary suspension of operations due to repairs, calamity, or unexpected interruption,
Temporary downturn causing short-term lack of available work.

What does not qualify:

Using “floating” as a penalty or retaliation,
Using “floating” to force resignation or avoid lawful termination requirements,
Keeping employees unassigned while work exists or while others are hired to do the same work.

2) Good faith (no intent to circumvent security of tenure)

Good faith is evaluated through conduct and documentation, such as:

Efforts to locate assignments or reassign the employee,
Transparent communication,
Non-discriminatory selection of who gets floated.

3) Definite and temporary—not exceeding six (6) months

Floating status must have a start date and must be monitored so it does not exceed six months.
“Indefinite floating” is a red flag and often treated as constructive dismissal.

4) The employee remains employed (relationship continues)

Indicators that the employment relationship continues:

The employee is recallable,
The employer maintains the employee in its roster,
The employer communicates updates and issues recall orders when available.

5) Procedural requirements and due process (what you must do, even if it’s “not a dismissal”)

Although temporary layoff is not a termination per se, Philippine practice strongly favors clear written process, because legality often turns on proof.

A. Written notice to the employee

A proper floating status notice typically states:

The business reason (e.g., end of client contract; temporary suspension),
The effective date of floating status,
The expected duration or that it will not exceed six (6) months,
The employee’s obligation to remain reachable and report when recalled,
How recall will be made (phone/email/letter), and where to report.

B. Document the business event and the lack of assignments

Keep records such as:

Client contract termination/expiration,
Project completion reports,
Work schedules showing lack of available posts,
Internal memos on reassignment efforts.

C. Good-faith reassignment/recall efforts

For industries where reassignment is feasible (security/manpower), the employer should be able to show:

Active search for posts,
Offers of available assignments (reasonable in location and terms),
The employee’s responses.

D. Avoid “paper floating”

Issuing a notice is not enough. If the employer’s actions show there was work available or the employee was singled out unfairly, floating status may still be illegal.

6) Pay and benefits during floating status

A. Salary principle: generally “no work, no pay”

In a typical temporary layoff/floating status:

The employee usually does not receive wages because no work is performed.
However, contract/CBA/company policy may provide pay or allowances during off-detail; those must be honored.

B. Leave credits

Employers sometimes apply available leave credits (vacation leave, etc.) by policy or agreement. Once leave credits are exhausted, continued absence from work due to lack of assignment usually becomes unpaid.

C. Statutory benefits and contributions (practical compliance)

Because the employment relationship continues, employers should handle statutory reporting and contributions consistently with the governing rules of each agency and the payroll reality (e.g., if there is no compensation, contribution computations and reporting may differ). What matters legally is that the employer does not misclassify the employee as “terminated” while keeping them floating.

D. 13th month pay

If the employee receives no salary during the floating period, that period generally does not add to “basic salary earned,” affecting the proportional 13th month computation, unless company policy provides otherwise.

7) The six-month rule: what must happen before it expires

By the end of the six-month floating period, the employer must choose a lawful path:

Option 1: Recall / reinstate to work

Reinstate the employee to the former position or a substantially equivalent one,
Maintain seniority rights.

Option 2: Implement a lawful termination under authorized causes (if the situation persists)

If the employer truly cannot provide work beyond six months, it should not keep the employee floating indefinitely. Instead, the employer typically must proceed under authorized causes (e.g., retrenchment, redundancy, closure/cessation of business), which requires:

Substantive ground (real redundancy/retrenchment/closure with evidence),
Procedural requirements, commonly including written notice to the employee and to DOLE within the required period before effectivity,
Separation pay, when mandated by the applicable authorized cause (subject to the specific ground and legal standards).

Option 3: Mutually agreed separation (with caution)

A voluntary separation/resignation or settlement must be:

Truly voluntary,
With clear terms,
Free from coercion or undue pressure, or it risks being invalidated as constructive dismissal.

8) When floating status becomes illegal (constructive dismissal patterns)

Floating status often fails legally when it resembles a forced termination. Common indicators include:

Exceeding six (6) months without recall or lawful termination process
Bad faith: employer had available work but withheld it
Discrimination or retaliation: only certain employees are floated without objective basis
Repeated cycling: floating an employee repeatedly to avoid regular assignment and benefits
Unreasonable “recall” offers designed to trigger refusal (e.g., clearly punitive assignments, impossible reporting requirements), then using refusal as a pretext for dismissal
Constructive demotion or materially worse terms upon recall without valid justification

In disputes, employers commonly bear the practical burden of showing floating status was bona fide, temporary, and within the legal limit.

9) Floating status vs other management tools (critical distinctions)

A. Floating status vs preventive suspension

Preventive suspension is disciplinary, tied to an ongoing investigation, and is not justified by lack of work.
Floating status is business-driven (lack of assignment / temporary suspension of undertaking).

B. Floating status vs redundancy/retrenchment/closure

Authorized-cause termination ends employment and triggers notices and separation pay rules.
Floating status preserves employment only temporarily and is capped at six months.

C. Floating status vs reduced workdays / flexible work arrangements

Reducing workdays/hours is a different mechanism and must still comply with wage laws and any relevant agreements; it is not the same as placing employees on unpaid off-detail.

10) Compliance checklist (best practice that aligns with legal expectations)

A defensible floating status program for regular employees typically includes:

Identify and document the bona fide business reason (loss of contract, temporary suspension, lack of work).
Select employees objectively (skills match, availability of posts, seniority rules if applicable, CBA rules).
Issue a written floating status notice with start date, reason, recall mechanism, and explicit 6-month cap.
Keep proof of reassignment efforts (post openings, offers, employee responses).
Maintain communication cadence (periodic updates).
Track the six-month deadline per employee; do not let it lapse.
Before six months ends, either recall or implement a lawful authorized-cause separation with required notices and separation pay when applicable.
Ensure final actions are consistent and non-discriminatory, and supported by records.

11) Model contents of a floating status notice (outline)

A compliant notice commonly contains:

Employer letterhead, date, employee name/position
Statement of the business circumstance causing temporary lack of work
Effective date of off-detail/floating status
Confirmation that employment relationship continues and employee will be recalled when assignment is available
Statement that floating will not exceed six (6) months from effective date
Reporting/recall instructions and contact details
Clarification on pay status (e.g., no work no pay), use of leave credits if applicable, and continuation of obligations (return of equipment, confidentiality, etc.)
Acknowledgment line for receipt

12) Bottom-line rules

Floating status is lawful only as a bona fide temporary layoff.
It must be in good faith, backed by a real lack of work, and cannot exceed six (6) months.
Employers should use clear written notices and keep proof of reassignment efforts.
Past six months, the employer must reinstate or proceed with a lawful authorized-cause separation—not extend floating indefinitely.

General information note: This is an educational discussion of Philippine labor standards and common litigation principles on temporary layoff/floating status; outcomes depend heavily on facts, documentation, and applicable agreements (CBA/contract/company policy).