Temporary Suspension and Lay-off Period Not Changed by DO 174

Recently, I have witnessed a lot of articles and information given as advice that states that the Period of Temporary Suspension under the Labor Code of the Philippines has changed to be just three (3) months. This is wholly incorrect, and anyone advising the public and clients of this is giving bad advice.

I can only assume that the informants and advisors are referring to the changes made under Department Order 174, Series of 2017 when they state that the period for temporary suspension has been reduced to three months.

Unfortunately, these people are getting it completely wrong. Their assumption that DO 174-17 has anything to do with the period of temporary suspension under the Labor Code, which is found in Article 301 (prev. 286), When Employment not Deemed Terminated, is misguided and unjustified. Ignorance of the law excuses no one. Especially when workers whose lives and livelihood may depend on this information are being affected.

Atty. Benjo Santos Benavidez, Director of Bureau of Labor Relations
Atty. Benjo Santos Benavidez, Director of Bureau of Labor Relations

I read the “DOLE-NCR prepares for D.O. 174” Press Release, which I believe to be the initial source of this misguiding misinformation. The article, which is published on the DOLE website, can be read HERE.

The source of this confusion and misinformation can be found in the final paragraph, which states:

“D.O 174 likewise reduced the period upon which an employee may be placed on floating status or the period before an employee may be separated on ground of redundancy after payment of separation pay. The six (6) months period under D.O 18-A has been reduced to three (3) months under the new regulation.”

The huge problem we have here is that DO 174-17 is not about regular employees under the normal rules of the Labor Code. The Department Order is about the “RULES IMPLEMENTING ARTICLES 106 TO 109 OF THE LABOR CODE, AS AMENDED”, and is written to supersede Department Order 18-A, Series of 2011. Articles 106 to 109 refer to Contractors and Subcontractors only.

As such, the section that people are incorrectly referring to, which was badly quoted in the Press Release I mentioned previously, pertains only to employees of contractors and subcontractors hired to provide labor to a company or third party or principal, and not to employees directly employed to perform their jobs.

Section 13, which gives the details of the misinformation
Section 13, which gives the details of the misinformation

The section that should have been read in DO 174-17 is “Section 13 Effect of Termination of Employment”, and the relevant badly-quoted phrase comes in paragraph 3 of said section, which reads:

“Where the termination results from the expiration of the Service Agreement, or from the completion of the phase of the job or work for which the employee is engaged, the latter may opt to wait for re-employment within three (3) months to resign and transfer to another contractor-employer.”

Technically, this is not actually a form of temporary suspension or lay-off; it is a voluntary option only for employees of contractors and subcontractors to wait for up to three months for a new job to do, without being terminated at the end of the work period, before resigning and looking for a new contractor to work for.

Labor Code of the Philippines, Renumbered, DOLE Edition
Labor Code of the Philippines, Renumbered, DOLE Edition

However, this has absolutely nothing to do with Article 301 (prev. 286) of the Labor Code, which still reads:

When Employment not Deemed Terminated. The bona fide 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 if he 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.”

It seems that a great many people have taken this DO and mistakenly believed that the change refers to Article 301. The Press Release itself is somewhat misleading, though it does imply from its title that it is pertinent only to DO 174-17.

In fact, if you read the article through fully, you will find that it clearly states in the middle that:

“This new Department Order seeks to regulate the contracting/subcontracting arrangements between the principal and the contractors/subcontractors”

Ergo, the correct advice for anyone questioning how long you can be placed under temporary Suspension for is

SIX (6) MONTHS

I have said it before, and will say it again:

IF YOU DO NOT KNOW WHAT YOU ARE TALKING ABOUT, PLEASE REFRAIN FROM GIVING BAD ADVICE.

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