The Consequences of Failing to Submit the Establishment Report Form when Floating Employees.

            The past year has been particularly hard for both worker and employee alike, and no more so that when an employee has been placed on “floating” status, because the company cannot afford to remain open or has to reduce their staff for a period.

            It has long been permitted for any business to reduce temporarily the workers on active status under Article 301 of the Labor Code, for a “bona fide suspension of the operation of a business or undertaking”.

            Considered to be part of that ever-present right of Management Prerogative, which is set in jurisprudence to allow the employer to run his business as he sees fit within the bounds of the law, the bona fide suspension of the employer-employee relationship was permitted, on submission of at least 30 days notice to the worker and the DOLE and with evidence available giving grounds for the suspension, for a period not exceeding six (6) months.

COVID-19 altered the Requirement of Notice.

            The onset of the COVID-19 pandemic in March 2020 meant that certain rules had to be relaxed by the DOLE in order to aid businesses in being able to stay afloat and to allow temporary suspensions instead of terminations. The changes meant that the requirement for “Notice” to the worker and the DOLE at least 30 days in advance of the date of effectivity of the suspension were waived.

            With no requirement to give the advance 30-day notice to the worker and the DOLE, companies could get on with floating their workers while they closed to prevent further business losses and stay afloat when they were permitted to reopen again under the IATF guidelines.

            That did not mean that the requirement of “Notice” was completely waived, as many employers seemed to think it was. It merely meant that the requirement for “advance” notice was waived, and the notice to the worker, which MUST still be in writing, could be given up to or on the same day that the floating became effective. But it could not be given AFTER the floating start date.

            It also meant that the notice to the DOLE was not completely waived, and that it could be given to the DOLE Provincial/Field Office “as soon as possible in the case of adoption of flexible work arrangement or temporary closure”. At this point, only notices of Retrenchment or Redundancy required advance notice of at least 30 days.

            Yet many companies were lax in filing their Establishment Report Form (ERF), known as the RKS Form 5 Series of 2020, as provided for use in Labor Advisory No. 17-A Series of 2020.

Companies still claim they filed the correct form.

            When it came to workers complaining about being floated with no notice, companies invariably claimed that they had filed the form and notified the worker, even to the point of lying to the Labor Arbiter in their statements, claims, and Position Papers. It became common practice for companies who had failed to submit their forms to claim they had and insist on the legal mandate of “he who alleges must prove”.

            This meant that, in the eyes of these companies, and their inept legal departments, the onus of proof of the failure of the Company to submit their ERF with the worker’s name on it at the correct time was with the worker, who had no access to the company’s records to prove their allegations.

Freedom of Information is the answer.

            Fortunately, there is a little-known form available from the DOLE, known as the “Freedom of Information (FOI) Request Form”, which is freely available from your local DOLE office or online from the DOLE-FOI page. It is included in the DOLE Freedom of Information People’s Manual, so that you can read up on what FOI means in the DOLE, which includes the form as Annex B. Unfortunately, the online application does not extend to information about individuals, so cannot be used for this specific request.

            Once completed, with attached valid government-issued ID (photocopy), the form should be scanned and sent by email to the Regional Office in the location of the employer’s business address. The email addresses are even available as part of Annex A of the Manual.

            This is the ONLY way the normal worker can find out if and when the employer filed their ERF to the DOLE, and should be done in advance of filing any claim for Constructive Dismissal after the end of the initial six months floating.

            And once you have the email evidence from the DOLE FOI team giving the exact date of any filing containing your name, or confirmation that no such filing was ever submitted, you have the proof you need to counter the employer’s claim that it was.

            This process can take time, and so far most submissions made by our office have taken 2-3 weeks to revert with the required information. So it is essential to make sure you file this request well in advance of your Request for Assistance and SEnA complaint in the DOLE.

What happens when the employer is shown to have failed to submit the ERF for your floating period?

            Since it normally takes a complaint in the DOLE/NLRC to discover that the company failed to submit the correct ERF for their floating of workers most employees do not even realize that they may have been incorrectly suspended until they start to complain about not being reinstated at the end of the six months.

            However, if you had been floated incorrectly because no ERF was submitted to the DOLE, it means that your suspension was done improperly, though not illegally, and you can claim nominal damages for the deliberate omission on the part of the employer, as a failure to follow Due Process in the suspension.

            In a recently-handled case, the Labor Arbiter found that, due to the failure of the company to submit their ERF for the floating of employees under LA 17-20 (with amendments 17-a and 17-b), the normal rules of Article 301 of the Labor Code would apply.

            The employer provided the correct notice to the workers concerned, but did not file their ERF to the DOLE at all. When the complaint was filed with the Arbiter for Constructive Dismissal at the end of their period of floating, the employer provided in their Position Paper an Establishment Report Form that was obviously faked. In the Resolution, the Labor Arbiter stated:

“Notably, the complainants’ status of employment was not reported to DOLE. Upon perusal of the Establishment Report Form (pro forma) with List of Affected Employees submitted by respondent company, it was observed that the same was merely a copy of the form allegedly submitted to the DOLE, and without validation, either by personal service, registered mail or email showing receipt of the latter. This was also substantiated by the email from DOLE attached by the complainant when he inquired about the Establishment Report Form, which was confirmed by the DOLE that no such report had been made.”

“Clearly, from the foregoing, the one-month notice rule was not complied with. At the same time, the respondents never showed that any notice of the retrenchment was sent to the DOLE. Accordingly, such violation of the complainants’ right to statutory procedural due process warrants the payment of indemnity in the form of nominal damages in the amount of PhP30,000.00 for each of the complainants.”

            The Arbiter also found in favor of the complainants for Constructive Dismissal, as the employer failed to reinstate the workers after their period of floating reached its end, and they continued on floating for another two months without any response from the company to their requests for reinstatement and information on their status.

Is it Constructive Dismissal when the ERF is not filed with the DOLE?

            Actually, no, it does not constitute Constructive Dismissal when the employer fails to file the Establishment Report Form to the DOLE at the start of your floating period. Since it is merely considered to be a failure of Due Process in the temporary retrenchment, the failure of procedural due process does not make the actual suspension illegal unless the employer cannot show evidence of their bona fide grounds for the suspension.

            The Temporary Retrenchment would only be considered illegal and grounds for Constructive Dismissal if the employer failed to be able to show that the business had suffered, or was likely to suffer, from financial losses or reverses in the event that it did not take such action. As it states in Article 298 of the Labor Code:

“The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or 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…”

            While Article 298 relates to permanent retrenchment, it must be noted that there is no specific provision of law for temporary retrenchment, but that it was dealt with in the case of Sebuguero v. NLRC.

Jurisprudence proves Constructive Dismissal in failure to reinstate

            There is a wealth of jurisprudence that covers the use of the “bona fide suspension of business operations” as per Article 301. From the cases of PT & T Corp. v. National Labor Relations Commission, San Miguel Brewery Sales Force Unit v. Ople, and Lopez v. Irvine Construction Corp., to name a few, it is clear that the failure to meet the requirements of Article 301 can be grounds for constructive dismissal as well.

            When the employer places the worker on what the law considers as “temporary retrenchment” under Article 301, they have a mere six months before that worker must be either reinstated or retrenched with Separation Pay (except in cases where the closure or cessation of operations was due to serious business losses or financial reverses). The failure of the employer to complete these requirements within one month of the end of the floating period results in the Constructive Dismissal of the worker.

“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.” (PT & T Corp. v. NLRC)

The Employment Law Project is a subsidized project of ELS Legal Consultants, and can be contacted through its dedicated Facebook page.


4 thoughts on “The Consequences of Failing to Submit the Establishment Report Form when Floating Employees.

  1. May i ask sor separation pay comptation for employees who had work schedudule of on 2x a week since it is a department strore.. May i know then how it is computed since they diidnt come tothe store everyday of the week but just 2 to 3 days of work on weekend..These are for the yesra 2021 and 2020.


    1. Separation pay is defined in law, in the Labor Code, and is the same for everyone, regardless of how many days a week they normally worked in the pandemic.

      The standard computation is one-half month per year of service for retrenchment, and one month per year of service for redundancy, where six months is equal to one year. If they have not completed one year of service, they are entitled to the minimum amount of half or one month pay.

      And the pay is their basic pay plus allowances as provided for in their contract or agreement. For example, if their basic pay is 10,000 per month and they get rice allowance of 500 and transport allowance of 1000, their salary for Separation Pay would be based on 11,500 per month. For Retrenchment, this would come to 5,750 per year and for redundancy, 11,500 per year of service.

      Does this help?


  2. Hunter Sebastian

    I was hired on Nov. 22, 2021. On December 29, 2021, an evaluation form was given to me stating that the client in the US doesn’t see that I am fit for the job, also a letter was given to me stating that I am temporarily placed on floating status. Business is open and continues to hire.


    1. Since the client has deemed you unfit for their program, your company, which I assume may well be a call center, has placed you on floating status pending reassignment to another account? If this is correct, then they are entitled to do that, even if they are open. The other option, since their client deemed you were not suitable, would be termination, which they could do as you are still probationary and have failed the client evaluation.

      They should place you in a different account that is currently hiring, as you are a priority employee now over the new hires, being a floating employee. I would talk to your HR and find out what they are doing to move you to another account as soon as possible. If they are doing nothing, and suitable accounts are still hiring, then you may want to speak to someone more senior than your HR, and explain that they have to reinstate you since you are floating, and their grounds for such are flimsy, at best. Also if they continue your floating for more than six months, they are required to reinstate you or retrench you ,whether they have open positions or not. The reinstatement would HAVE to be to your former account, and without loss of seniority and salary.


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