​Airborne Maintenance and Allied Services, Inc. vs. Egos, April 3, 2019

Facts:
On April 9, 1992, Airborne Maintenance and Allied Services, Inc. and Francis T. Ching (Airborne), a company engaged in providing manpower services to various clients, hired the services of Arnulfo M. Egos (Egos) as Janitor. He was assigned at the Balintawak Branch of Meralco, a client of Airborne.
 
On June 30, 2011, the contract between Airborne and Meralco-Balintawak Branch expired and a new contract was awarded to Landbees Corporation, and the latter absorbed all employees of Airborne except Egos, who allegedly had a heart ailment. Egos consulted another doctor and was declared as fit to work. He showed the duly issued medical certificate to Airborne but the same was disregarded. Egos also reported for work but was just ignored by Airborne and was told that there was no work available for him. Feeling aggrieved, he filed a complaint for constructive/illegal dismissal on August 05, 2011.
 
Airborne, however, argues that there was no dismissal to speak of as it had placed respondent on floating status when the contract with Meralco was terminated.
 
Issue:
Whether or not notice to DOLE is mandatory before placing the employees in a floating status.

​Held:
Yes. Jurisprudence has set that the employer should notify the Department of Labor and Employment (DOLE) and the affected employee, at least one month prior to the intended date of suspension of business operations. An employer must also prove the existence of a clear and compelling economic reason for the temporary shutdown of its business or undertaking and that there were no available posts to which the affected employee could be assigned.
 
The suspension of employment under Article 301 of the Labor Code is only temporary and should not exceed six months, as the Court explained in PT & T Corp. v. National Labor Relations Commission: x x x Article 286 [now Article 301] 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.