Extension of Floating Status or Suspension of Employment During a Pandemic

Nicolas & de Vega Law Article: Extension of Floating Status or Suspension of Employment During a Pandemic

Last 23 October 2020, the Department of Labor & Employment (DOLE) issued Department Order No. 215 series of 2020 (DO 215).  Said DO shall be effective after fifteen days from its publication in a newspaper. Thus, this should be good sometime mid-November 2020.

DO 215 amended some parts of the implementing rules of the Labor Code in order to preserve employment during these challenging times. It bears noting that Section 12 of the Omnibus Rules Implementing the Labor Code allows the suspension of relationship between an employer or employee for a period not to exceed six (6) months. This is more popularly known as floating status, temporary lay-off, temporary off-detail or temporary retrenchment. Since the lay-off is only temporary, the employment status of the employee is not deemed terminated, but merely suspended.

DO 215 allowed the extension of suspension of employment for a period not exceeding six (6) months.

However, DO 215 gave employers more flexibility during these trying times. Under DO 215, in cases of declaration of war, pandemic and similar national emergencies, the employer and the employees (through the union or with the assistance of a representative of DOLE) can meet in good faith for the purpose of extending the suspension of employment.  This extension can last for a period not exceeding six (6) months. This extension effectively allowed the suspension of employment to last for a year.

In order to effectuate this extension of suspension, a meeting between the employer and employees must be done.  Further, the employer must make a report to the DOLE about this extension at least ten (10) days prior to the effectivity thereof.

The employee can seek other work during this period of extension

An interesting amendment introduced by DO 215 is allowing the employees to seek alternative employment during this period of extension. He shall not lose his employment with the company if he sought such alternative employment except if he tendered his resignation in the original company.  Moreover, if the company decides to retrench employees, the retrenched employee who sought alternative employment shall be entitled to separation pay. In addition, DO 215 mandates that the retrenched employees shall have priority in rehiring if such employees indicate their desire to resume work not later than one (1) month from resumption of operations.

Upon mutual agreement of the employer and employee, the employees may be recalled back to work even before the expiration of the extension of suspension of employment.

The first 6 months of suspension of employment shall be included in the computation of the employees’ separation pay

Finally, DO 215 enunciates that the extension of suspension of employment shall not affect the right of employees to separation pay. It further discussed that the first six (6) months of suspension of employment shall be included in the computation of the employees’ separation pay.  Does that mean that the six (6) month extension is not included in computing the separation pay? DO 215 did not answer this.  However, in our humble opinion, it appears that it shall not be included since DO 215 could have expressly stated it but refrained from doing so.

About Nicolas and De Vega Law Offices

If you need assistance in labor-related issues, compliance with DOLE issuances, and company employment policies,  or business-related concerns, we can help you find solutions. Nicolas and de Vega Law Offices is a full-service law firm in the Philippines.  You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines.  You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website www.ndvlaw.com.

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