When “Floating Status” Becomes Constructive Dismissal in Philippine Labor Law

This article explains the legal concept of “floating status” (temporary layoff or off-detail), when it’s valid, and when it crosses the line into constructive dismissal, with practical guidance for workers, HR, and counsel. Philippine context.

1) What “floating status” is—legally

Statutory anchor. The Labor Code recognizes a bona fide suspension of work or temporary layoff for up to six (6) months. During this period, the employment relationship continues, but the employee does not work and is generally unpaid under the “no work, no pay” rule.
Typical industries. Security, janitorial/manpower, construction, logistics, BPO accounts, and project-based or client-dependent operations commonly place workers “off-detail,” “on reserves,” or “floating” when a client contract ends or when operations are temporarily paused.
Purpose. It is meant to give the employer a short window to reorganize or secure a new assignment without severing employment.

2) When floating status is valid

A temporary layoff is generally valid if the employer can show:

Good faith business reason. Examples: client contract expires/cancels; seasonality; fire or facility shutdown; supply chain disruption; lawful government closure; credible reorganization.
Temporary nature. The period does not exceed six months counted from the actual start of the no-work status.
Communication and documentation. Employees are notified in writing of the off-detail/temporary layoff, the reason, and the start date; employer transparently records efforts to reassign.
No discrimination. Choices about who is floated are based on fair, business-related criteria.
Active efforts to reassign. Especially for security and manpower agencies, the employer must genuinely try to deploy the worker to another client or post within the 6-month window.

Practical note: Some CBAs or company policies promise a retainer or partial pay/benefits during off-detail. Those contractual promises are enforceable if they exist, but the Labor Code itself doesn’t require pay during a valid temporary layoff.

3) The 6-month line: where constructive dismissal begins

“Constructive dismissal” is involuntary resignation because continued employment is rendered impossible, unreasonable, or unlikely due to the employer’s acts. With floating status, the classic triggers are:

Exceeding 6 months. If the employee remains on floating/off-detail beyond six months, the law treats this as a dismissal. If no authorized-cause process (see §4) was done, it is illegal dismissal.
Indefinite or vague layoff. Notices that say “until further notice” or “until we find you a post” with no definite end and no genuine redeployment efforts can be deemed constructive dismissal even before the 6 months lapses—especially where the circumstances show abandonment of the employee or bad faith.
Serial or cyclical floating to evade the cap. Repeated back-to-back off-detail periods that functionally exceed six months (or are used to sidestep security of tenure) may be struck down.
Selective or retaliatory floating. Off-detail that targets unionists, whistleblowers, older workers, or pregnant employees can be constructive dismissal and unfair labor practice.
Demotions or pay cuts disguised as redeployment. A “return” offer that slashes pay/benefits or rank without lawful basis can itself be constructive dismissal.

4) If work truly can’t resume: authorized causes and separation pay

If, before the 6th month ends, the employer reasonably foresees that re-assignment is not possible, it must transition to an authorized-cause termination, which requires:

Authorized ground (e.g., retrenchment to prevent losses, redundancy, closure/cessation not due to serious losses, installation of labor-saving devices),
Written notice to the employee and DOLE at least 30 days before effectivity, and
Separation pay (amount depends on the ground: typically ½ month per year of service for retrenchment/closure due to losses, 1 month per year for redundancy/closure not due to losses; fractions ≥ 6 months count as a year).

Failure to do this within the 6-month floating window usually results in illegal dismissal.

5) Employer’s duties while an employee is floating

Keep contact lines open. Provide HR contact and a reasonable check-in cadence.
Proactively source posts. Document emails to clients, bids, roster planning, and assignment offers.
Offer suitable redeployment. The post should be substantially similar in rank, pay, and location. Minor changes can be reasonable; material downgrades need employee consent and legal basis.
Maintain regulatory compliance. Continue statutory reporting and records; ensure final action (return to work or authorized-cause termination) before the six-month deadline.

6) Employee options and remedies

If you suspect constructive dismissal, you can:

Ask in writing for reassignment details, timeline, and efforts; this builds your record.
File a Single-Entry Approach (SENA) request with DOLE for conciliation-mediation.
File an illegal dismissal case with the NLRC or Labor Arbiter. Usual remedies if you win:
- Reinstatement (or payroll reinstatement), with full backwages from dismissal up to actual reinstatement; or
- Separation pay in lieu of reinstatement (typically 1 month pay per year of service) plus backwages; and
- Attorney’s fees/damages in proper cases (e.g., bad faith).
Money claims (unpaid wages/allowances/benefits promised by CBA or policy).

Timing tip: The prescriptive period for illegal dismissal is 4 years (for the action for reinstatement and damages) while money claims generally prescribe in 3 years from when due. File sooner rather than later.

7) Evidence that wins (for each side)

Employees typically prove:

The start date of floating (notice, memo, schedule, text/Viber/HR email).
Duration (show it hit or passed 6 months).
Lack of redeployment (no offers, or offers that were demotions or too distant without basis).
Bad faith (comparators who were assigned while you weren’t, union activity, etc.).

Employers typically prove:

Good-faith business cause (client termination letters, financials, shutdown orders).
Diligent efforts to reassign (client bids, vacancy matrix, employee contact logs).
Timely action: either actual redeployment within 6 months or authorized-cause termination with proper notices and separation pay.

8) Nuances by industry

Security & manpower agencies. “Off-detail” is common, but agencies must actively pool and redeploy. Keeping guards off-detail past 6 months—without authorized-cause termination—is classic constructive dismissal.
Project/construction. End-of-phase gaps may justify short floating; however, if projects aren’t forthcoming, shift to authorized-cause before six months.
BPO/accounts. Client loss or ramp-downs allow temporary layoff while the company re-benches staff; exceeding six months or offering lower-tier roles without basis risks constructive dismissal.

9) Frequently-asked edge cases

Does accepting a short-term, lower-paid post waive my rights? Not automatically. You can accept under protest and still contest an unlawful demotion or pay cut.
What if I refused a redeployment far from my original site? If the transfer is reasonable under contract/CBA and business needs (and not punitive), refusal may hurt your case. If it’s unduly harsh (e.g., sudden inter-island move without allowances), it may support constructive dismissal.
Are benefits due during floating? By default, no wages are due. But CBA, company policy, or specific contracts (e.g., retainers) can grant benefits—and those are enforceable.
Can the 6-month cap be extended by agreement? As a rule of thumb, no—security of tenure is statutory. Private agreements that effectively waive it are closely scrutinized and often invalid. Exceptional, time-bound government issuances (e.g., during extraordinary events) have existed, but outside such narrow windows, assume the 6-month cap controls.

10) Checklist: avoiding (or proving) constructive dismissal

For HR/Employers

□ Issue a clear written off-detail notice with the start date and reason.
□ Calendar the six-month deadline; decide by Month 5 whether redeployment is realistic.
□ Keep a paper trail of redeployment efforts and employee communications.
□ If redeployment won’t happen, pivot to authorized-cause termination with 30-day dual notice (employee + DOLE) and pay proper separation.

For Employees

□ Keep copies of notices, rosters, chats, emails.
□ Send a written query/demand around the 3rd–4th month asking for updates.
□ If Month 6 is approaching with no concrete post, seek DOLE/NLRC help.
□ If offered a return at lower pay/rank, reply in writing (accept under protest or explain refusal) and consult counsel.

11) Quick outcomes map

Scenario	Likely legal result	Typical monetary outcome
Floating ends with valid reassignment within ≤6 months	Valid	No backwages; continuity of service
>6 months floating; no authorized-cause process	Constructive/illegal dismissal	Reinstatement or separation pay + full backwages
Transition to authorized-cause within 6 months with proper notices	Valid termination	Separation pay per ground; no backwages
Indefinite or retaliatory off-detail, or sham redeployment	Constructive dismissal	Reinstatement/separation pay + backwages; possible damages

12) Drafting corner (sample clauses & memos)

A. Off-Detail Notice (employer)

Date, employee particulars
Clear reason (e.g., Client X contract ended on [date])
Start date of off-detail
Statement that employer will endeavor to redeploy within 6 months and contact protocol
Reminder that no wages accrue during the period unless policy/CBA provides otherwise

B. Employee Demand for Redeployment (employee)

Identify start date of off-detail
Ask for specific redeployment timeline and posts considered
Reserve rights against constructive dismissal if 6-month cap will be breached

13) Key takeaways

Six months is the bright line. Floating that reaches or exceeds it—without a proper authorized-cause off-ramp—converts to dismissal and is usually illegal.
Process and paper matter. Honest business reasons and a solid redeployment trail save employers; their absence usually wins the case for employees.
Don’t “park” people. Either reassign in time or terminate for authorized cause with notices + separation pay.

This article is for general information and practical guidance. For a specific case, facts and documents (contracts, CBAs, notices, messages) will determine strategy and outcome.