In limbo: Regular BPO employees on ‘floating status’ left with no pay

Pauline Macaraeg
In limbo: Regular BPO employees on ‘floating status’ left with no pay
The coronavirus crisis causes BPO companies to lose clients, leaving employees to bear the brunt of the pandemic

MANILA, Philippines – After risking exposure to COVID-19 for months while majority of other industries shut down, several regular employees of business process outsourcing (BPO) companies now report being put on “floating status” as offshore accounts pulled out their Philippine operations.

Jackie*, who has been an employee of an international BPO company in Pasay City for 10 years, is one of them. She was placed on “floating status” for 90 days starting June 1 – during which she will not be paid her regular salary.

Jackie was told it was due to the pandemic. The account she was handling, an Australian telecommunications company, pulled out of the Philippines during the crisis.

“Ang term na ginamit nila (The way they phrased it was): the company has already run out of funds to support us,” Jackie said.

Her employer told her they would start her redeployment process, or assignment to a similar role within the company, after 60 days. The redeployment process would then take another 30 days. The entire 90-day period is not paid.

Jackie said around 60 regular employees in her department alone are in the same boat. She estimates that in the entire company, there are over 1,000 other employees under the Australian account put on floating status.

Floating status – is it legal?

Arnold de Vera, labor lawyer and professor at the University of the Philippines Diliman and Ateneo de Manila University, said there is nothing formally written about floating status in the country’s laws, but the Supreme Court has recognized its validity in previous cases.

“It’s simply a temporary stoppage of work,” De Vera said, explaining that it is applied in situations where there is less work than workers within a company.

De Vera said the early cases of floating status in the country were due to repairs of machinery or renovations which led to suspension of operations. It was then applied to other situations, such as in the case of security guards and BPO workers.

Lawyer Leslie Dy, senior partner specializing in employment and labor at SyCip Salazar Hernandez & Gatmaitan, also said the implementation of floating status does not interrupt the employment relationship between the company and the employee.

Dy said placing employees on floating status is a prerogative of management, but exercising it should be fair and reasonable. “Placing an employee on floating status in bad faith may be a basis for a claim of constructive dismissal,” she said.

The maximum period allowed for the application of floating status is 6 months. De Vera said exceeding that period would be considered retrenchment.

No source of income

While putting employees on floating status is legal, the problem is that employees like Jackie are left with no source of income for months despite being regular employees. She’s also reluctant to find another job because she fears that would mean she’d have to resign.

“Kapag nag-resign kami, we’d lose our chance na mabayaran ‘yung lump sum ng tenure. So kumbaga, kung iisipin mo, parang ginigipit ka nila para bumitiw ka. [In] the end, hindi ka na nila mapo-protect. ‘Pag nauna kang sumuko, eh di panalo sila. ‘Pag nag-stay ka, pero ‘yung pagdadaanan mo 3 months ka na hindi ka susuweldo, parang gano’n siya,” Jackie said.

(If we resign, we’d lose the lump sum tied to our tenure. So if you think about it, it’s like they’re forcing you to resign. In the end, they won’t be able to protect you. If you give up first, they win. The alternative is you stay, but you won’t be paid for 3 months. It’s like that.)

What’s more frustrating for Jackie was that the company has not provided any assistance for them during this period.

“Walang binigay na financial aid. And what’s funny – tinanong ko sila, ‘Ano ‘yung ibibigay ‘nyo sa amin or what help can we expect from you?’ Noong sinabi nila na mag-fo-floating kami, sabi nila, ‘We’re trying our best to look for a better opportunity for you.’ ‘Yun lang,” she said.

(There was no financial aid. And what’s funny – I asked them, “What will you give us or what help can we expect from you?” When they told us we were going to be put on floating status, they only said, “We’re trying our best to look for a better opportunity for you.” That’s it.)

Jackie said all of the employees in her department are regular employees, and most of them have worked for the company for at least 5 years.

Under the law, the company’s only responsibility once it implements floating status is to call the employees back once work becomes available again. Unfortunately, De Vera said the company has no obligation to give them money or compensation because there is no work done.

However, Dy added that since those on floating status remain to be employees of the company, they should continue to be entitled to benefits such as health insurance.

De Vera also noted that employees on floating status are not prevented from looking for work elsewhere, as long as there is no violation of their contract. Both De Vera and Dy said it is important to check employment contracts and company policies first.

“In some companies, working for another company is considered ‘moonlighting’ or constitutes disloyalty which may be subject to disciplinary action, including termination of employment,” Dy said.

De Vera added that employees should return once the company calls them back even if they are employed somewhere else, because if they don’t return it would be considered resignation.

Unqualified for government subsidies

On top of their predicament, employees like Jackie were not qualified to receive financial support from the government during the lockdown because they are employed by BPOs.

Mylene Cabalona, president of the BPO Industry Employees Network, said BPO employees’ applications for subsidy were not approved by the Department of Labor and Employment (DOLE). They were also not qualified for the aid provided by the Department of Social Welfare and Development (DSWD).

“The problem is, these people are breadwinners. May mga pinapaaral ‘to, kailangan kumain, may mga mortgages, may mga bills (They send kids to school, they must eat, they have mortgages and bills). They can’t afford to be on no work, no pay. And the government doesn’t have financial support sa amin (for us),” Cabalona said.

This is the case for Kenneth*, Jackie’s coworker who was also under the same Australian account that pulled out from their BPO employer. In late May, he was initially told he would be on floating status starting June 1 like Jackie.

Kenneth, however, was luckier than Jackie. Their employer was able to redeploy him to another account in the first week of June. But the gig would only last until September, he was told. After that, he’s expected to be put on floating status, too, unless the situation improves.

Kenneth has been working for the same company as Jackie for over 7 years. Both of them still worked on-site when the lockdown measures were imposed. Although both employees are grateful their employer provided them with hotel accommodation, shuttles, and free meals during the lockdown, they were hoping the company would offer something that could sustain their families.

“Umuupa lang po ako dito sa Manila. Taga-probinsiya po ako at yes po, sa akin lang po umaasa pamilya ko,” Kenneth said. (I only rent a place here in Manila. I’m from the province and yes, I’m the breadwinner of our family.)

What next?

In cases similar to Jackie’s, who said employment in other companies would constitute her resignation, De Vera said employees could try to renegotiate with their employers. “But they have to get it in writing,” he said, stressing the importance of documentation.

De Vera also said that employees on floating status should now be qualified for the emergency subsidy programs of the government, particularly DOLE’s. The problem, however, is that the government already ran out of funds last April.

“So ngayon ang puwede nilang tingnan is DSWD (So now they could check the DSWD), which may still have money, or their LGU (local government unit). Minsan kasi ang LGU may sariling pondo for their own residents (Some LGUs have funds for their own residents),” De Vera said.

Now, Jackie no longer goes to the office to do the job she has done for the past 10 years. She may still use up her leave credits, but those are limited and wouldn’t be enough to sustain her expenses for 3 months.

When asked about her plans, she replied: “Wala, actually. Hindi pa namin alam kung paanong mangyayari (None, actually. We don’t know yet what will happen to us).” –

*Names were changed to protect their privacy

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Pauline Macaraeg

Pauline Macaraeg is digital forensics researcher for Rappler. She started as a fact checker and researcher in 2019, before becoming part of Rappler's Digital Forensics Team. She writes about the developing digital landscape, as well as the spread and impact of disinformation and harmful online content. When she's not working, you can find her listening to podcasts or K-pop bops.