SECURITY GUARDS CANNOT BE CONSTRUCTIVELY DISMISSED FOR BEING

ON FLOATING STATUS
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 198538

September 29, 2014

EXOCET SECURITY AND ALLIED SERVICES CORPORATION and/or MA.

TERESA MARCELO, Petitioner,
vs.
ARMANDO D. SERRANO, Respondent.
DECISION
VELASCO, JR., J.:
Nature of the Case
This is a Petition for Review on Certiorari under Rule 45 seeking to reverse and set aside
the March 31, 2011 Decision1 and September 7, 2011 Resolution of the Court of Appeals
(CA) in CA-G.R. SP No. 113251, which ordered petitioner to pay respondent separation
pay and backwages fqr having been illegally dismissed from employment.
The Antecedent Facts
Petitioner Exocet Security and Allied Services Corporation (Exocet) is engaged in the
provision of security personnel to its various clients or principals. By virtue of its contract
with JG Summit Holdings Inc. (JG Summit), Exocet assigned respondent Armando D.
Serrano (Serrano) on September 24, 1994 as "close-in" security personnel for one of JG
Summit's corporate officers, Johnson Robert L. Go.2 After eight years, Serrano was reassigned as close-in security for Lance Gokongwei, and then to his wife, Mary Joyce
Gokongwei.3 As close-in security, records show that Serrano was receiving a monthly
salary of P11,274.30.4
On August 15, 2006, Serrano was relieved by JG Summit from his duties. For more than
six months after he reported back to Exocet, Serrano was without any reassignment.
OnMarch 15, 2007, Serrano filed a complaint for illegal dismissal against Exocet with the
National Labor Relations Commission (NLRC).5
For its defense, Exocet denied dismissing Serrano alleging that, after August 15, 2006,
Serrano no longer reported for duty assignment as VIP security for JG Summit, and that
on September 2006, hewas demanding for VIP Security detail to another client. However,
since, at that time, Exocet did not have clients in need of VIP security assignment,
Serrano was temporarily assigned to general security service.6 Exocet maintained that it
was Serrano who declined the assignment on the ground that he is not used to being a
regular security guard. Serrano, Exocet added, even refused to report for immediate duty,
as he was not given a VIP security assignment.7

Considering the parties respective allegations, the Labor Arbiter ruled that Serrano was
illegally dismissed. In its June 30, 2008 Decision, the Labor Arbiter found that Serrano,
while not actually dismissed, was placed on a floating status for more than six months
and so, was deemed constructively dismissed. Thus, the Labor Arbiter ordered Exocet to
pay Serrano separation pay,8 viz:
Since complainant prayed for separation pay in lieu of reinstatement, he is entitled to the
same, computed below as follows:
"SEPARATION PAY: September 24, 1994 August 15, 2006 = 12
years. P300.00 x 13 x 12 years = P46,800.00"
WHEREFORE, premises considered, respondent corporation is hereby directed to pay
complainants monetary awards as computed above.
SO ORDERED.9
Not satisfied with the award, Serrano appealed the Labor Arbiters Decision to the
NLRC. In its March 5, 2009 Resolution, the NLRC initially affirmed the ruling of the
Labor Arbiter,but modified the monetary award to include the payment of backwages for
six months that Serrano was not given a security assignment. The dispositive portion of
the March 5, 2009 Resolution reads:
ACCORDINGLY, premises considered, the decision appealed from is hereby modified.
The respondents are hereby ordered to pay complainant separation pay plus backwages
computed from [the] date he effectively became dismissed from service which is after the
lapse of the 6 month period up to the issuance of thisdecision, the computation of which
is attached as Annex A.
All others are hereby affirmed.10
Acting on Exocets motion for reconsideration, however, the NLRC, in its September 2,
2009 Resolution, further modified its earlier decision by removing the award for
backwages.11 The NLRC deviated from its earlier findings and ruled that Serrano was
notconstructively dismissed, as his termination was due to his own fault, stubborn refusal,
and deliberate failure to accept a re-assignment.12 Nevertheless, the NLRC proceeded to
affirm in totothe decision of the Labor Arbiter on the ground that Exocet did not interpose
the appeal. The falloof the NLRCs September 2, 2009 Resolution reads:
WHEREFORE, the motion is GRANTED and the assailed decision is RECONSIDERED
and SET ASIDE. Consequently, the decision of the Labor Arbiter is hereby upheld in
toto.
SO ORDERED.13
On January 22, 2010, the NLRC issued another Resolution denying Serranos motion for
reconsideration.14Hence, not satisfied with the NLRCs ruling, Serrano filed a petition for
certiorari with the CA assailing the September 2, 2009 Resolution of the NLRC. Serrano
insisted that he was constructively dismissed and, thus, isentitled to reinstatement without
loss of seniority rights and to full backwages from the time of the alleged dismissal up to
the time of the finality of the Decision.

On March 31, 2011, the appellatecourt rendered a Decision in Serranos favor, reversing
and setting aside the NLRCs September 2, 2009 Resolution and ordering Exocet topay
Serrano separation pay and backwages.15 In so ruling, the CA found that Serrano was
constructively dismissed, as Exocet failed to re-assign him within six months after
placing him on "floating status."16 The appellate court disposed of Serranos appeal as
follows:
WHEREFORE, the assailed Resolutions promulgated on September 2, 2009 and January
22, 2010 issued by the NLRC LAC No. 09-003163-08 (NLRC NCR No. 00-03-0242307) are REVERSED and SET ASIDE, and in lieu thereof, a new judgment is ENTERED
ordering respondent company to pay petitioner his separation pay and backwages.
Upon finality of this decision, the Research and Computation Unit of public respondent
NLRC is DIRECTED to recompute the monetary benefits due to petitioner in accordance
with this decision.
SO ORDERED.
Petitioner Exocets Motion for Reconsideration was denied by the appellate court inits
September 7, 2011 Resolution.17 Hence, Exocet filed this petition.
The Issue
The sole issue for resolution is whether or not Serrano was constructively dismissed. The
Courts Ruling
The petition has merit.
The crux of the controversy lies on the consequence of the lapse of the six-month period,
during which respondent Serrano was placed on a "floating status" and petitioner Exocet
could not assign him to a position he wants. The appellate court was of the view that
Serrano was constructively dismissed. The Court maintains otherwise.
While there is no specific provision in the Labor Code which governs the "floating
status" or temporary "off-detail" of security guards employed by private security
agencies, this situation was considered by this Court in several cases as a form of
temporary retrenchment or lay-off.18 The concept has been defined as that period of time
when security guards are in between assignments or when they are made to wait after
being relieved from a previous post until they are transferred to a new one.19 As pointed
out by the CA, it takes place when the security agencys clients decide not to renew their
contracts with the agency, resulting in a situation where the available posts under its
existing contracts are less than the number of guards in its roster. It also happens
ininstances where contracts for security services stipulate that the client may request the
agency for the replacement of the guards assigned to it, even for want of cause, such that
the replaced security guard may be placed on temporary "off-detail" if there are no
available posts under the agencys existing contracts.20
As the circumstance is generally outside the control of the security agency or the
employer, the Court has ruled that when a security guard is placed on a "floating status,"
he orshe does not receive any salary or financial benefit provided by law. Pido v. National
Labor Relations Commission21 explains why:

Verily, a floating status requires the dire exigency of the employers bona fidesuspension
of operation of a business or undertaking. In security services, thishappens when the
security agencys clients which do not renew their contracts are more than those that do
and the new ones that the agency gets. Also, in instances when contracts for security
services stipulate that the client may request the agency for the replacement of the guards
assignedto it even for want of cause, the replaced security guard may be placed on
temporary "off-detail" if there are no available posts under respondents existing
contracts.
When a security guard is placed on a "floating status," he does not receive any salary or
financial benefit provided by law. Due to the grim economic consequences to the
employee, the employer should bear the burden of proving that there are no posts
available to which the employee temporarily out of work can be assigned." (emphasis
supplied)
It must be emphasized, however, that although placing a security guard on "floating
status" or a temporary "off-detail" is considered a temporary retrenchment measure, there
issimilarly no provision in the Labor Code which treats of a temporary retrenchment or
lay-off. Neither is there any provision which provides for its requisites or its
duration.22 Nevertheless, since an employee cannot be laid-off indefinitely, the Court has
applied Article 292 (previously Article 286) of the Labor Code by analogyto set the
specific period of temporary lay-off to a maximum of six (6) months. The said provision
states:
ART. 292. When employment not deemed terminated.- The bonafide 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 ifhe 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.
Thus, this Court has held, citing Sebuguero v. NLRC,23 that the placement of the
employee on a floating status should not last for more than six months. After six months,
the employee should be recalled for work, or for a new assignment; otherwise,he is
deemed terminated.
There is no specific provision of law which treats of a temporary retrenchment or lay-off
and provides for the requisites in effecting it or a period or duration therefor. These
employees cannot forever be temporarily laid-off. To remedy this situation or fill the
hiatus, Article 286 [now 292] may be applied but only by analogy to set a specific period
that employees may remain temporarily laid-off or in floating status.Six months is the
period set by law that the operation of a business or undertaking may be suspended
thereby suspending the employment of the employees concerned. The temporary lay-off
wherein the employees likewise cease to work should also not last longer than six
months. After six months, the employees should either be recalled to work or
permanently retrenched following the requirements of the law, and that failing to comply
with this would be tantamount to dismissing the employees and the employer would thus
be liable for such dismissal.

In accordance with the aforementioned ruling, the Department of Labor and Employment
(DOLE) issued Department Order No. 14, Series of 2001 (DO 14-01), entitled
"GuidelinesGoverning the Employment and Working Conditions of Security Guards and
Similar Personnel in the Private Security Industry," Section 6.5, in relation to Sec. 9.3, of
which states that the lack of service assignment for a continuous period of six (6) months
is an authorized cause for the termination of the employee, who is then entitled to a
separation pay equivalent to half month pay for every year of service, viz:
6.5 Other Mandatory Benefits. Inappropriate cases, security guards/similar personnel are
entitled to the mandatory benefits as listed below, although the same may not beincluded
in the monthly cost distribution in the contracts, except the required premiums form their
coverage:
a. Maternity benefit as provided under SS Law;
b. Separation pay if the termination of employment is for authorized causeas provided by
law and as enumerated below:
Half-Month Pay Per Year of Service, but in no case less than One Month Pay if
separation pay is due to:
1. Retrenchment or reduction of personnel effected by management to prevent serious
losses;
2. Closure or cessation of operation of an establishment not due to serious losses or
financial reverses;
3. Illness or disease not curable within a period of 6 months and continued employment is
prohibited by law or prejudicial to the employees health or that of coemployees;
4. Lack of service assignment for a continuous period of 6 months.
xxxx
9.3 Reserved Status A security guard or similar personnel may be placed in a work pool
or on reserved status due to lack of service assignments after the expiration or termination
of the service contract with the principalwhere he/she or assigned or due to temporary
suspension of agency operations.
No security guard or personnel can be placed in a work pool or on reserved status in any
of the following situations: a) after expiration of a service contract if there are other
principals where he/she can be assigned; b) as a measure to constructively dismiss the
security guard; and c) as an act of retaliation for filing complaints against the employer
on violations of labor laws, among others.
If after the period of 6 months, the security agency/employer cannot provide work or give
assignment to the reserved security guard, the latter can be dismissed from service and
shall be entitled to separation pay as described in subsection 6.5.
Security guards on reserved status who accept employment in other security agencies or
employers before the end of the above six-month period may not be given separation pay.
(emphasis supplied)

In Reyes v. RP Guardians Security Agency, Inc.,24 the Court explained the application of
DO 14-01 to security agencies and their security guards, and the procedural requirements
with which the securityagencies must comply:
Furthermore, the entitlement of the dismissed employee to separation pay of one month
for every year of service should not be confused with Section 6.5 (4) of DOLE D.O. No.
14 which grants a separation pay of one half month for every year service x x x.
xxxx
The said provision contemplatesa situation where a security guard is removed for
authorized causes such as when the security agency experiences a surplus of security
guards brought about by lack of clients.In such a case, the security agency has the option
to resort to retrenchment upon compliance with the procedural requirements of "twonotice rule"set forth in the Labor Code. (emphasis supplied)
Thus, to validly terminate a security guard for lack of service assignment for a continuous
period of six months under Secs. 6.5 and 9.3 of DO 14-01, the security agency must
comply with the provisions of Article 289 (previously Art. 283) of the Labor
Code,25 which mandates that a written notice should be served on the employee on
temporary off-detail or floating status andto the DOLE one (1) month before the intended
date of termination. This is also clear in Sec. 9.2of DO 14-01 which provides:
9.2 Notice of Termination - In caseof termination of employment due to authorized
causes provided in Article 283 and 284 of the Labor Code and in the succeeding
subsection, the employer shall serve a written notice on the security guard/personnel and
the DOLE at least one (1) month before the intended date thereof.
In every case, the Court has declaredthat the burden of proving that there are no posts
available to which the security guard may be assigned rests on the employer. We ruled in
Nationwide Security and Allied Services Inc. v. Valderama:26
In cases involving security guards,a relief and transfer order in itself does not sever
employment relationship between a security guard and his agency. An employee has the
right to security of tenure, but this does not give him a vested right tohis position as
would deprive the company of its prerogative to change his assignment or transfer him
where his service, as securityguard, will be most beneficial to the client. Temporary "offdetail" or the period of time security guards are made to wait until they are transferred or
assigned to a new post or client does not constitute constructive dismissal, so long as such
status does not continue beyond six months.
The onus of proving that there is no post available to which the security guard can be
assigned rests on the employer x x x. (emphasis supplied)
It cannot, therefore, be gainsaid thatthe right of security guards to security of tenure is
safeguardedby administrative issuances and jurisprudence, in parallel with the mandate of
the Labor Code and the Constitution to protect labor and the working people.
Nonetheless, while the Court has recognized the security guards right to security of
tenure under the "floating status" rule, the Court has similarly acknowledged the
management prerogative of security agencies to transfer security guards when necessary
in conducting its business, provided it is done in good faith. In Megaforce Security and
Allied Services, Inc. v. Lactao,27 the Court explained:

In cases involving security guards,a relief and transfer order in itself does not sever
employment relationship between a security guard and his agency. An employee has the
right tosecurity of tenure, but this does not give him such a vested right in his position as
would deprive the company of its prerogative to change his assignment or transfer him
where his service, as security guard, will be most beneficial to the client. Temporary "offdetail" or the period of time security guards are made to wait until they are transferred or
assigned to a new post or client does not constitute constructive dismissal as their
assignments primarily depend on the contracts entered into by the security agencies with
third parties.Indeed, the Court has repeatedly recognized that "off-detailing" is not
equivalent to dismissal, so long as such status does not continue beyond a reasonable
time; when such a "floating status" lasts for more than six months, the employee may be
considered to have beenconstructively dismissed. (emphasis supplied)
In the controversy now before the Court, there is no question that the security guard,
Serrano, was placed on floating status after his relief from his post as a VIP security by
his securityagencys client. Yet, there is no showing that his security agency, petitioner
Exocet, acted in bad faith when it placed Serrano on such floating status. What is more,
the present case is not a situation where Exocet did not recall Serrano to work within the
six-month period as required by law and jurisprudence. Exocet did, in fact, make an offer
to Serrano to go back to work. It is just that the assignmentalthough it does not
involvea demotion in rank or diminution in salary, pay, benefits or privilegeswas not
the security detail desired by Serrano.
Clearly, Serranos lack of assignment for more than six months cannot be attributed to
petitioner Exocet.1avvphi1 On the contrary, records show that, as early as September
2006, or one month after Serrano was relieved as a VIP security, Exocet had already
offered Serrano a position in the general security service because there were no available
clients requiring positions for VIP security. Notably, even though the new assignment
does not involve a demotion in rank or diminution in salary, pay, or benefits, Serrano
declined the position because it was not the post that suited his preference, as he insisted
on being a VIP Security.
In fact, even during the meeting with the Labor Arbiter, Exocet offered a position in the
general security only to be rebuffed by Serrano.28 It was as if Serrano obliged Exocet to
look for a client in need of a VIP securitythe availability of which is obviously not
within Exocets control, and by nature, difficult to procure as these contracts depend on
the trust and confidence of the client or principal on the security guard. As aptly found by
the NLRC:
Anent the clients action, respondentagency had no recourse but to assign complainant to
a new posting. However, complainant, having had a taste of VIP detail and perhaps the
perks that come with such kind of assignment, vaingloriously assumed that he can only
be assigned to VIP close-in posting and that he would accept nothing less. In fact, after
his relief and tardy appearance at respondents office, he was offered reassignment albeit
to general security services which he refused. Respondents clearly made known to him
that as of the moment no VIP detail was vacant or sought byother clients but complainant
was adamant in his refusal. Complainant even had the nerve to assert that he just be
informed if there is already a VIP detail available for him and that he will just report for
re-assignment by then.It is also well to note that to these allegations, complainant made
no denial.29 (emphasis supplied)

To repeat for emphasis, the security guards right to security of tenure does not give him a
vested right to the position as would deprive the company of its prerogative to change the
assignment of, or transfer the security guard to, a station where his services would be
most beneficial to the client. Indeed, an employer has the right to transfer or assign its
employees from one office or area of operation to another, or in pursuit of its legitimate
business interest, provided there is no demotion in rank or diminution of salary, benefits,
and other privileges, and the transfer is not motivated by discrimination or bad faith, or
effected as a form of punishment or demotion without sufficient cause.30
Thus, it is manifestly unfair and unacceptable to immediately declare the mere lapse of
the six-month period of floating status as a case of constructive dismissal, without
lookinginto the peculiar circumstances that resulted in the security guards failureto
assume another post. This is especially true in the present case where the security guards
own refusal to accept a non-VIP detail was the reason that he was not given an
assignment within the six-month period. The security agency, Exocet, should not then be
held liable.
Indeed, from the facts presented,Serrano was guilty of wilful disobedience to a lawful
order of his employer in connection with his work, which is a just cause for his
termination under Art. 288 (previously Art. 282) of the Labor Code.31 Nonetheless,
Exocet did not take Serranos wilful disobedience against him. Hence, Exocetis
considered to have waived its right to terminate Serrano on such ground.
In this factual milieu, since respondent Serrano was not actually or constructively
dismissed from his employment by petitioner Exocet, it is best that petitioner Exocet
direct him to report for work, if any security assignment is still available to him. If
respondent Serrano stillrefuses to be assigned to any available guard position, he shall be
deemed to have abandoned his employment with petitioner.
If no security assignment is available for respondent, petitioner Exocet should comply
with the requirements of DO 14-01, in relation to Art. 289 of the Labor Code, and serve a
written notice on Serrano and the DOLE one (1) month before the intended date of
termination, and pay Serrano separation pay equivalent to half month pay for every year
of his actual service.
As a final note, the Court reiterates that it stands to promote the welfare of employees and
continue to apply the mantle of protectionism in their favor. Thus, employees, like
securityguards, should not be laid-off for an indefinite period of time. However, We hold
that a similar protection should be given to employers who, ingood faith, have exerted
efforts to comply with the requirements of the law by offering reasonable work and
appropriate assignments during the six-month period. After all, the constitutional policy
of providing full protection to labor is not intended to oppress or destroy management,
and the commitment of this Court to the cause of labor does not prevent Us from
sustaining the employer when it is in the right, as in this case.32
IN VIEW OF THE FOREGOING, the instant petition is GRANTED. The March 31,
2011 Decision and September 7, 2011 Resolution of the Court of Appeals in CA-G.R. SP
No. 113251 are hereby REVERSEDand SET ASIDE. Moreover, the March 5, 2009 and
September 2, 2009 Resolutions of the National Labor Relations Commission in NLRC
LAC No. 09-003163-08 (NLRC NCR No. 00-03-02423-07), as well as the June 30, 2008

Decision of the Labor Arbiter in NLRC-NCR-00-03-02423-07, are also REVERSEDand

SET ASIDE.
Petitioner Exocet Security and Allied Services Corporation is neither guilty of illegal
dismissal nor constructive dismissal. Petitioner is hereby ORDERED to look for a
security assignment for respondent within a period of thirty (30) days from finality of
judgment. If one is available, petitioner is ordered to notify respondent Armando D.
Serrano to report to such available guard position within ten (10) days from notice. If
respondent fails to report for work within said time period, he shall be deemed to have
abandoned his employment with petitioner. In such case, respondent Serrano is not
entitled to any backwages, separation pay, or similar benefits.
If no security assignment is available for respondent within a period of thirty (30) days
from finality of judgment, petitioner Exocet should comply with the requirements of
DOLE Department Order No. 14, Series of 2001, in relation to Art. 289 of the Labor
Code, and serve a written notice on respondent Serrano and the DOLE one (1) month
before the intended date of termination; and pay Serrano separation pay equivalent to half
month pay for every year of his service.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate Justice
WE CONCUR:
DIOSDADO M. PERALTA
Associate Justice
MARTIN S. VILLARAMA, JR.
Associate Justice

BIENVENIDO L. REYES
Associate Justice

FRANCIS H. JARDELEZA
Associate Justice
AT T E S T AT I O N
I attest that the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court's Division.
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson
C E R T I F I C AT I O N
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Court's
Division.
ANTONIO T. CARPIO
Acting Chief Justice

Footnotes
1

Penned by Associate Justice Hakim S. Abdulwahid and concurred in by Associate

Justices Ricardo R. Rosario and Danton Q. Bueser.
2

Records, pp. 24, 33.

Id. at 24, 33.

Rollo, p. 91. The complaint was docketed as NLRC-NCR-00-03-02423-07 and entitled

Armando D. Serrano v. Exocet Security and Allied Services Corp. and/or Ma. Teresa
Marcelo.
5

Id. at 10.

Records, pp. 27, 35.

Id. at 27, 36.

Id. at 43.

Rollo, pp. 113-114.

10

Id. at 97-98.

11

Id. at 100.

12

Id. at 99.

13

Id. at 100.

14

Id. at 144-146. The falloof the January 22, 2010 NLRC Resolution reads
"WHEREFORE, the Motion for Reconsideration is hereby DENIED. SO ORDERED."
15

Id. at 92.

16

Id. at 88-89.

17

Id. at 94-95. The fallo of the September 7, 2011 CA Resolution reads "WHEREFORE,
the Motion for Reconsideration is hereby DENIED for lack of merit. SO ORDERED."
18

See Philippine Industrial Security Agency Corporation v. Dapiton, G.R. No. 127421,
December 8, 1999, 320 SCRA 124; Superstar Security Agency, Inc. v. National Labor
Relations Commission, G.R. No. 81493, April 3, 1990, 184 SCRA 74.
19

Salvaloza v. NLRC, G.R. No. 182086, November 24, 2010, 636 SCRA 184.

20

Id.

21

G.R. No. 169812, February 23, 2007, 516 SCRA 609.

22

Abad, Jr., COMPENDIUM ON LABOR LAW163 (2006); Azucena, Jr.,

EVERYONES LABOR CODE 349-350 (2006).

23

G.R. No. 115394, September 27, 1995, 248 SCRA 532. See also Agro Commercial
Security Services Agency, Inc. v. National Labor Relations Commission, G.R. Nos.
82823-24, July 31, 1989, 175 SCRA 790.
24

G.R. No. 193756, April 10, 2013, 695 SCRA 620.

25

ART. 289.Closure of establishment and reduction of personnel. The employer may

also terminate the employment of any employee due to x x x retrenchment to prevent
lossesor the closing or cessation of operation of the establishment or undertaking unless
the closing is for the purpose of circumventing the provisions of this Title, by serving a
written notice on the workers and the Ministry of Labor and Employment at least one (1)
month before the intended date thereof. x x x
In case of retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half
(1/2) month pay for every year of service, whichever is higher. A fraction of at least six
(6) months shall be considered one (1) whole year.
26

G.R. No. 186614, February 23, 2011, 644 SCRA 299.

27

G.R. No. 160940, July 21, 2008, 559 SCRA 110. See also Philippine Industrial Security
Agency Corporation v. Dapiton, supra note 18; and Salvaloza v. National Labor Relations
Commission, supra note 19.
28

Rollo, p. 142.

29

Id. at 98-99.

30

Salvaloza v. NLRC, supra note 19.

31

Art. 288. Termination by employer. An employer may terminate an employment for any
of the following causes:
a) Serious misconduct or wilful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
b) Gross and habitual neglect by the employee of his duties;
c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;
d) Commission of a crime or offense by the employee against the person of his employer
or any immediate member of his family or his duly authorized representatives; and
e) Other causes analogous to the foregoing. (emphasis supplied)
32

Capili v. NLRC, G.R. No. 117378, March 26, 1997, 270 SCRA 488; citing Garcia v.
NLRC, G.R. No. 110518, August 1, 1994, 234 SCRA 632.

ANOTHER JURISPRUDENCE ON FLOATING STATUS AND SGs

Republic of the Philippines

SUPREME COURT
Baguio City
THIRD DIVISION
G.R. No. 193756

April 10, 2013

VENANCIO S. REYES, EDGARDO C. DABBAY, WALTER A. VIGILIA,

NEMECIO M. CALANNO, ROGELIO A. SUPE, JR., ROLAND R. TRINIDAD,
and AURELIO A. DULDULAO, Petitioners,
vs.
RP GUARDIANS SECURITY AGENCY, INC., Respondent.
DECISION
MENDOZA, J.:
Before the Court is a petition for review under Rule 45 of the Rules of Court, assailing
the May 18, 2010 Amended Decision1 and the September 13, 2010 Resolution2 of the
Court of Appeals (CA), in C.A.-GR. SP No. 106643, which modified the April 9, 2008
Decision3 of the National Labor Relations Commission (NLRC) in NLRC LAC Case No.
11-002990-07, insofar as the award of backwages, the computation of separation pay, and
the refund for the trust fund contributions are concerned.
The Facts:
Petitioners Venancio S. Reyes, Edgardo C. Dabbay, Walter A. Vigilia, Nemesio M.
Calanno, Rogelio A. Supe, Jr., Roland R. Trinidad, and Aurelio A. Duldulao (petitioners)
were hired by respondent RP Guardians Security Agency, Inc. (respondent) as security
guards. They were deployed to various clients of respondent, the last of which were the
different branches of Banco Filipino Savings and Mortgage Bank (Banco Filipino).
In September 2006, respondents security contract with Banco Filipino was terminated. In
separate letters,4petitioners were individually informed of the termination of the security
contract with Banco de Oro. In two (2) memoranda, dated September 21, 20065 and
September 29, 2006,6 petitioners were directed to turnover their duties and
responsibilities to the incoming security agency and were advised that they would be
placed on floating status while waiting for available post. Petitioners waited for their next
assignment, but several months lapsed and they were not given new assignments.
Consequently, on April 10, 2007, petitioners filed a complaint7 for constructive dismissal.
In its position paper,8 respondent claimed that there was no dismissal, of petitioners,
constructive or otherwise, and asserted that their termination was due to the expiration of
the service contract which was coterminus with their contract of employment.
On August 20, 2007, the Labor Arbiter (LA) rendered a decision9 in favor of petitioners
ordering respondent to pay petitioners separation pay, backwages, refund of trust fund,
moral and exemplary damages, and attorneys fees.

Aggrieved, respondent appealed to the NLRC.

On April 9, 2008, the NLRC promulgated its decision10 sustaining the finding of
constructive dismissal by the LA, and the awards she made in the decision. The award of
moral and exemplary damages, however, were deleted.
Upon denial of its motion for reconsideration,11 respondent filed a petition for certiorari
before the CA.
On February 26, 2010, the CA rendered a decision12 dismissing the petition and affirming
the assailed NLRC decision and resolution.
On motion for reconsideration, the CA issued the Amended Decision13 dated May 18,
2010, modifying its earlier decision. Citing Section 6.5 (4) of Department Order No. 14
of the Department of Labor and Employment (DOLE D.O. No. 14), otherwise known as
Guidelines Governing the Employment and Working Conditions of Security Guards and
Similar Personnel in the Private Security Industry, the CA reduced the computation of the
separation pay from one month pay per year of service to one-half month pay for every
year of service; reduced the refund of trust fund contribution from Sixty (P60.00) Pesos
to Thirty (P30.00)Pesos; and deleted the award of backwages and attorneys fees.
Hence, this petition anchored on the following:
GROUNDS FOR THE PETITION
8.0 The Court of Appeals has decided a question of substance in a way that is not in
accord with law and with applicable decisions of the Supreme Court concerning the
Petitioners basic right to fair play, justice and due process, with more reason that a
conclusion of law cannot be made in the motion for reconsideration.
8.1 The first decision promulgated by the Court of Appeals on February 26, 2010
affirming the decision of the NLRC awarding both backwages and separation pay of one
month pay for every year of service can only be set aside upon proof of grave abuse of
discretion, fraud or error of law.
8.2 Petitioners are entitled to backwages for the period covered from the time the Labor
Arbiter rendered the decision in their favor on August 20, 2007 until said decision was
reversed by the Court of Appeals in its Amended Decision promulgated on May 18,
2010.14
There is no doubt that petitioners were constructively dismissed. The LA, the NLRC and
the CA were one in their conclusion that respondent was guilty of illegal dismissal when
it placed petitioners on floating status beyond the reasonable six-month period after the
termination of their service contract with Banco de Oro. Temporary displacement or
temporary off-detail of security guard is, generally, allowed in a situation where a
security agencys client decided not to renew their service contract with the agency and
no post is available for the relieved security guard.15 Such situation does not normally
result in a constructive dismissal. Nonetheless, when the floating status lasts for more
than six (6) months, the employee may be considered to have been constructively
dismissed.16 No less than the Constitution17 guarantees the right of workers to security of
tenure, thus, employees can only be dismissed for just or authorized causes and after they
have been afforded the due process of law.18

Settled is the rule that that 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 his other benefits or their monetary
equivalent computed from the time his compensation was withheld up to the time of
actual reinstatement.19 If reinstatement is not possible, however, the award of separation
pay is proper.20
Backwages and reinstatement are separate and distinct reliefs given to an illegally
dismissed employee in order to alleviate the economic damage brought about by the
employees dismissal.21 "Reinstatement is a restoration to a state from which one has been
removed or separated" while "the payment of backwages is a form of relief that restores
the income that was lost by reason of the unlawful dismissal." Therefore, the award of
one does not bar the other.22
In the case of Aliling v. Feliciano,23 citing Golden Ace Builders v. Talde,24 the Court
explained:
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and
reinstatement. The two reliefs provided are separate and distinct. In instances where
reinstatement is no longer feasible because of strained relations between the employee
and the employer, separation pay is granted. In effect, an illegally dismissed employee is
entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer
viable, and backwages.
The normal consequences of respondents illegal dismissal, then, are reinstatement
without loss of seniority rights, and payment of backwages computed from the time
compensation was withheld up to the date of actual reinstatement. Where reinstatement is
no longer viable as an option, separation pay equivalent to one (1) month salary for every
year of service should be awarded as an alternative. The payment of separation pay is in
addition to payment of backwages. [Emphasis Supplied]
Furthermore, the entitlement of the dismissed employee to separation pay of one month
for every year of service should not be confused with Section 6.5 (4) of DOLE D.O. No.
14 which grants a separation pay of one-half month for every year service, to wit:
6.5 Other Mandatory Benefits. In appropriate cases, security guards/similar personnel are
entitled to the mandatory benefits as listed below, although the same may not be included
in the monthly cost distribution in the contracts, except the required premiums for their
coverage:
a. Maternity benefit as provided under the SSS Law;
b. Separation pay if the termination of employment is for authorized cause as provided by
law and as enumerated below:
Half-Month Pay Per Year of Service, but in no case less than One Month Pay, if
separation is due to:
1. Retrenchment or reduction of personnel effected by management to prevent serious
losses;
2. Closure or cessation of operation of an establishment not due to serious losses or
financial reverses;

3. Illness or disease not curable within a period of 6 months and continued employment is
prohibited by law or prejudicial to the employee's health or that of co-employees; or
4. Lack of service assignment for a continuous period of 6 months.The said provision
contemplates a situation where a security guard is removed for authorized causes such as
when the security agency experiences a surplus of security guards brought about by lack
of clients. In such a case, the security agency has the option to resort to retrenchment
upon compliance with the procedural requirements of "two-notice rule" set forth in the
Labor Code and to pay separation pay of one-half month for every year of service.
In this case, respondent would have been liable for reinstatement and payment of
backwages. Reinstatement, however, was no longer feasible because, as found by the LA,
respondent had already ceased operation of its business.25 Thus, backwages and
separation pay, in the amount of one month for every year of service, should be paid in
lieu of reinstatement.
As to their claim of attorney's fees, petitioners were compelled to file an action for the
recovery of their lawful wages and other benefits and, in the process, incurred expenses.
Hence, petitioners are entitled to attorney's fees equivalent to ten percent (10%) of the
monetary award.26
Finally, as to the refund of the trust fund contribution, a perusal of the records shows that
the amount deducted for the trust fund contribution from each petitioner varies. Some
petitioners were deducted the amount of P15.00 every payday while others were
deducted P30.00 every payday. Thus, the Court deems it proper to refer the computation
of the same to the LA.
WHEREFORE, the pet1t10n is GRANTED. The May 18, 2010 Amended Decision and
the September 13, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 106643
are REVERSED and SET ASIDE. The April 9, 2008 Decision of the National Labor
Relations Commission, modifying the August 20, 2007 Decision of the Labor Arbiter, is
REINSTATED.
The case is REMANDED to the Labor Arbiter for further proceedings to make a detailed
computation of the exact amount of monetary benefits due petitioners.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson
DIOSDADO M. PERALTA
Associate Justice
MARVIC MARIO VICTOR F. LEONEN
Associate Justice

ROBERTO A. ABAD
Associate Justice

AT T E S T AT I O N
I attest that the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court's Division.
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson, Third Division
C E R T I F I C AT I O N
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Court's
Division.
MARIA LOURDES P. A. SERENO
Chief Justice

Footnotes
1

Rollo, pp. 49-53. Penned by Associate Amelita G. Tolentino and concurred in by

Associate Justices Arturo G. Tayag and Franchito N. Diamante.
2

Id. at 55-56.

Id. at 72-77.

Id. at 117-118.

Id. at 119.

Id. at 120.

Rollo, p. 90.

Id. at 109-116.

Id. at 82-89. Penned by Labor Arbiter Teresita D. Castillon-Lora.

10

Id. at 72-77.

11

Id. at 79-81.

12

Id. at 58-71. Penned by Associate Amelita G. Tolentino and concurred in by Associate

Justices Arturo G. Tayag and Franchito N. Diamante.
13

Id. at 49-53.

14

Id. at 27.

15

Salvoza v. National Labor Relations Commission, G.R. No. 182086, November 24,
2010, 636 SCRA 184, 197-198.

16

Sentinel Security Agency, Inc. v. National Labor Relations Commission, 356 Phil. 434,
443 (1998).
17

Article 13, Section 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure, humane conditions of work, and a
living wage. They shall also participate in policy and decision-making processes affecting
their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial
peace.
The State shall regulate the relations between workers and employers, recognizing the
right of labor to its just share in the fruits of production and the right of enterprises to
reasonable returns to investments, and to expansion and growth.
18

Article 277 Labor Code.

19

Article 279 of the Labor Code.

20

Torillo v. Leogardo, Jr., 274 Phil. 758, 765 (1991).

21

St. Michaels Institute v. Santos, 422 Phil. 723, 736 (2001).

22

De Guzman v. National Labor Relations Commission, 371 Phil. 192, 202 (1999).

23

G.R. No. 185829, April 25, 2012, 671 SCRA 186.

24

G.R. No. 187200, May 5, 2010, 620 SCRA 283, 289-290, citing Macasero v. Southern
Industrial Gases Philippines, G.R. No. 178524, January 30, 2009, 577 SCRA 500.
25

26

Page 7 of the Labor Arbiter's Decision, rollo, p. 88.

PCL Shipping Philippines, Inc. v. National Labor Relations Commission, 540 Phil. 65,
85(2006); Rutaquio v. National Labor Relations Commission. 375 Phil. 405,418 (1999).