5/13/2014 When It is Legal to Put An Employee on Floating Status | HR Practitioner' s Guide

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When It is Legal to Put An Employee on Floating Status
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Situation: An employee who was hired as project manager filed an emergency leave of absence and
announced her intention to resign following her disappointment over the continued employment of another
employee in the company. Because of the importance of her role in the companys only project at the time, the
employer sought her replacement so as not to disrupt business. The disgruntled employee, however, later
changed her mind about leaving the company and decided to resume her work. The employer informed her
that because they were constrained to hire a replacement when she threatened to leave, she would have to be
placed on floating status in the meantime.
The disgruntled employee filed a complaint for illegal dismissal challenging the floating status as
constructive dismissal. While the case was pending, the employer sent her a notice of termination due to
redundancy or lack of a posting similar to the position at her previous project.
What the Supreme Court said:
Off-detailing or putting an employee on floating status is not equivalent to dismissal, for as long as the
floating status does not last more than 6 months. In this case, there is no constructive dismissal when the
employee was placed on floating status until such time that another project could be secured for her.
Legal Basis for Off-Detailing: The legal basis for off-detailing is Art. 286 of the Labor Code which has
been applied in many industries when, as a consequence of the bona fide suspension of the operation of a
business or undertaking, an employer is constrained to put employees on floating status for a period not
exceeding 6 months.
(Case of: Nippon Housing Phil, Inc. vs. Leynes, GR. No. 177816, August 3, 2011)
Constructive dismissal can also arise from employee transfers and demotions. While transfers and demotions
are generally allowed in the exercise of management prerogative, there are certain rules surrounding their
implementation that the employer must observe, in order to avoid costly litigation or illegal dismissal cases in
the Department of Labor. HR managers may wish to learn more about transfers and demotions from a guide
entitled, 44 Rules on Employee Transfer and Demotion.
Related posts:
1. Legal Labor Options for Distressed Companies
2. When an Employee with Undertime Works on Overtime
3. When the Company Exercises Control: Agent or Employee?
4. A Ebook Guide on Employee Leave Benefits
This entry was posted in Labor Jurisprudence, Labor Laws and tagged constructive dismissal, floating status, illegal dismissal, off-detailing. Bookmark the permalink.
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