Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

-venteenth Congress
st Regular Sess

House Bill No. 5589

Introduced by REP. MAI

EL ANTONIO F. ZUBIRI

EXPLANATORY NOTE

Under Article 300 (formerly, Article. 286) of the Labor Code, an employer may
temporarily suspend the employment of an employee or place him on floating status in case of a
“bona fide suspension of the operation of a business or undertaking. As ruled by the Supreme
Court in a long line of decided cases. the said employee is deemed constructively dismissed
(illegally dismissed) if the period of suspension of employment exceeds 6 months. Article 300
of the Labor Code provides thus:

ART. 300 [286]. 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 of 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.

While the practice of temporarily suspending an employee's employment or placing him
on floating status is prevalent in the security agency industry. the said practice is likewise done
in other business endeavors where employees are assigned to perform a specific undertaking or
serve a specific contract. In the event that the said undertaking or contract is temporarily
suspended, an employer who anticipates the eventual restoration of the said undertaking or
contract may then opt to temporarily suspend the employee’s employment or place him on
floating status rather than permanently terminate his services on grounds of redundancy.

By express mandate of Article 300 (286) of the Labor Code, the worker's employment is
deemed to continue unless its suspension exceeds six (6) months. During the said period of work
suspension, however, the affected worker oftentimes does not earn anything from his employer
in light of the time-honored “No Work — No Pay” precept under Philippine labor laws. Under
these circumstances. the worker is thus forced to dip into any savings he may have accumulated
in order to sustain his family during the entire period of work suspension. If his savings prove
insufficient to tide him and his family throughout the entire duration of the work suspension, he
has no choice but to resign his employment without the benefit of separation pay and forfeit
whatever rights of tenure that may have accrued in his favor.



In the same way that the law protects the interests of employers by relieving them of the
burden of having to pay the salary of a worker whose employment is suspended through no fault
or desire of the employer, the law must equally protect the interests of the worker by allowing
them to continue earning income for their families despite the suspension of their employment
and without being deemed to have abandoned or having foregone their employment.

It is thus the aim and purpose of this bill to correct an unintended injustice by allowing
workers whose employment was suspended by reason of a bona fide suspension of business or
undertaking to continue proyiding for their families without the unweleome consequence of
being deemed by their emplgyers to have abandoned or forgone their original employment.

of this bill is earnestly sought.

MANVEL ANTONIO F. ZUBIRI
Representative
3" District, Bukjfinon


Republic of the Philippines
HOUSE OF REPRI ATIVES
Quezon City

venteenth Cong
First Regular S.

House Bill No. 5589

S
jon

Introduced by REP. MANUEL ANTONIO F. ZUBIRE

AN ACT
SECTION 300 (FORMERLY ARTICLE 286) OF THE LABOR CODE OF
‘THE PHILIPPINES AND FOR OTHER PURPOSES

AMENDIN

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

Article 286) of Presidential Decree No. 442.
'. is hereby amended to read as follows:

SECTION 1. Section 300 (former!
otherwise known as the “Labor Code of the Philippines

ART. 300 [286]. 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. During the period of suspension of
operation of such business or undertaking, an employee whose employment
suspended or who is placed on floating status by his employer may take up
temporary gainful employment with any other employer without being
deemed to have abandoned or otherwise foregone his original employment. In
all such cases, the employer shall reinstate the employee to his former position
without loss of seniority of 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.

SECTION 2. Separability Clause. - If any provision of this Act is declared invalid or
unconstitutional, other provisions hereof which are not affected thereby shall continue to be in
full force and effect.

SECTION 3. Repealing Clause. - All provisions of law. orders, decrees, executive orders,
including rules and regulations or parts thereof which are contrary to or inconsistent with the
this Act are hereby repealed or modified accordingly.

n (15) days following its
ast two (2) national newspapers of general circulation.

ION. 4. Effect

‘ ity Clause. - Thi
publication in the Off

| Gazette or at

Approved,