The Supreme Court has affirmed that placing a security guard on “floating status” for more than six months constitutes illegal dismissal. This ruling reinforces the security of tenure for employees, particularly in the security services industry, ensuring they are not left in indefinite uncertainty regarding their employment.

Six Months and Out: When “Floating Status” Sinks a Security Guard’s Job

This case arose when Janrie C. Dailig, a security guard, was relieved from his post and remained unassigned for over six months, leading him to file a complaint for illegal dismissal. The central legal question revolves around whether an employer can keep an employee in a prolonged “floating status” without providing work, and what the consequences are under Philippine labor law. The petitioner, Emeritus Security and Maintenance Systems, Inc., argued that Dailig was not dismissed but simply unassigned, while Dailig contended that this prolonged inactivity constituted constructive dismissal.

The Labor Code of the Philippines guarantees security of tenure to employees, meaning they can only be dismissed for just or authorized causes, with due process. In this context, the concept of “floating status” comes into play, particularly in industries like security services where employees are often assigned to different clients on a temporary basis. However, this floating status cannot be indefinite. The Supreme Court, in several cases, has established a six-month period as the maximum allowable duration for such a status. Beyond this period, the employee is considered constructively dismissed. Constructive dismissal occurs when the employer’s act of continued failure to provide work is seen as an act that coerces the employee to quit his employment because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.

The Supreme Court, in the case of Nationwide Security and Allied Services, Inc. v. Valderama, explicitly stated:

x x x the temporary inactivity or “floating status” of security guards should continue only for six months. Otherwise, the security agency concerned could be liable for constructive dismissal. The failure of petitioner to give respondent a work assignment beyond the reasonable six-month period makes it liable for constructive dismissal.  x x x.

In the case at hand, Emeritus Security relieved Dailig from his post on December 10, 2005, and he remained unassigned until he filed his complaint on June 16, 2006—a period exceeding six months. The company’s claim that they sent a notice requiring him to report for work was unsubstantiated and deemed self-serving. The Court emphasized the importance of providing substantial evidence to support such claims, which was lacking in this case. The Court of Appeals initially affirmed the finding of illegal dismissal but modified the decision by awarding separation pay instead of reinstatement, citing strained relations between the parties.

However, the Supreme Court disagreed with the Court of Appeals’ decision to award separation pay. According to Article 279 of the Labor Code, reinstatement is the primary remedy for illegally dismissed employees:

Security of Tenure. – x x x 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 back wages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

The Court clarified that separation pay is an exception, granted only when reinstatement is not feasible due to strained relations or other valid reasons. The circumstances under which separation pay may be awarded in lieu of reinstatement were discussed in Globe-Mackay Cable and Radio Corporation v. National Labor Relations Commission, providing the following reasons:

Over time, the following reasons have been advanced by the Court for denying reinstatement under the facts of the case and the law applicable thereto; that reinstatement can no longer be effected in view of the long passage of time (22 years of litigation) or because of the realities of the situation; or that it would be ‘inimical to the employer’s interest;’ or that reinstatement may no longer be feasible; or, that it will not serve the best interests of the parties involved; or that the company would be prejudiced by the workers’ continued employment; or that it will not serve any prudent purpose as when supervening facts have transpired which make execution on that score unjust or inequitable or, to an increasing extent, due to the resultant atmosphere of ‘antipathy and antagonism’ or ‘strained relations’ or ‘irretrievable estrangement’ between the employer and the employee.

In this instance, the Supreme Court found no evidence of strained relations between Emeritus Security and Dailig. The company even claimed to have complied with the reinstatement order, assigning Dailig to various posts after the Labor Arbiter’s decision. Dailig argued that he was reinstated by a different company, Emme Security, but the Court dismissed this argument, accepting the company’s claim that Emeritus and Emme were sister companies with the same directors and officers. Thus, the Court emphasized that reinstatement was the appropriate remedy in this case.

The decision underscores the importance of employers adhering to the prescribed six-month limit for keeping employees on floating status. Failure to provide work within this period can lead to costly illegal dismissal claims. It also serves as a reminder to employees, particularly those in industries with frequent reassignments, to be vigilant about their rights and to seek legal remedies if their floating status extends beyond the allowable period. This ruling reinforces the principle that security of tenure is a constitutionally protected right that cannot be circumvented by prolonged periods of job inactivity.

The court’s decision to reinstate the Labor Arbiter’s order, emphasizing the employee’s right to reinstatement and back wages, reinforces the importance of adhering to labor laws and protecting the rights of employees against unfair labor practices.

FAQs

What is “floating status” in employment?	Floating status refers to a temporary period of inactivity where an employee is not assigned work, often seen in industries like security services.
How long can an employee be on floating status?	According to Philippine jurisprudence, the maximum allowable duration for floating status is six months.
What happens if an employee is on floating status for more than six months?	If an employee remains unassigned for more than six months, it is considered constructive dismissal.
What is constructive dismissal?	Constructive dismissal occurs when an employer’s actions make continued employment impossible, unreasonable, or unlikely, effectively forcing the employee to resign.
What is the primary remedy for illegal dismissal?	The primary remedy for illegal dismissal is reinstatement to the former position without loss of seniority rights and with full back wages.
When is separation pay awarded instead of reinstatement?	Separation pay is awarded in lieu of reinstatement when reinstatement is not feasible, such as due to strained relations between the employer and employee.
What must an employer do to avoid illegal dismissal claims when reassigning employees?	Employers must ensure that employees are not kept on floating status for more than six months and should provide substantial evidence of efforts to reassign them.
What should an employee do if placed on prolonged floating status?	An employee should seek legal advice and may file a complaint for illegal dismissal if the floating status extends beyond six months.

This case serves as a critical reminder for both employers and employees in the Philippines. It highlights the importance of understanding and adhering to labor laws, particularly those concerning security of tenure and the allowable limits of floating status. Employers must ensure they provide timely work assignments to avoid constructive dismissal claims, while employees should be aware of their rights and seek legal recourse when necessary.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Emeritus Security and Maintenance Systems, Inc. vs. Janrie C. Dailig, G.R. No. 204761, April 02, 2014