Temporary lay-off
Petitioner Innodata Knowledge Services, Inc. (IKSI) engaged the services of respondents Socorro D’Marie Inting and 19 others as senior and junior reviewers with a contract duration of five years.
They were to review various litigation documents of Applied Computer Technologies (ACT).
On Oct. 7, 2010, respondents received a notice of forced leave from IKSI informing them that they will be placed on indefinite forced leave effective that same day due to changes in business conditions, client requirements, and specifications.
Consequently, respondents filed a complaint for illegal dismissal, reinstatement or payment of separation pay, backwages and damages against IKSI.
Does this complaint prosper?
Ruling: Yes.
Here, IKSI never offered any evidence that would indicate the presence of a bona fide suspension of its business operations or undertaking.
IKSI’s paramount consideration should be the dire exigency of its business that compelled it to put some of its employees temporarily out of work. This means that it should be able to prove that it faced a clear and compelling economic reason which reasonably constrained it to temporarily shut down its business operations or that of the ACT Project, incidentally resulting in the temporary lay-off of its employees assigned to said particular undertaking.
Due to the grim economic repercussions to the employees, IKSI must likewise bear the burden of proving that there were no other available posts to which the employees temporarily put out of work could be possibly assigned. Unfortunately, IKSI was not able to fulfill any of the aforementioned duties.
IKSI cannot simply rely solely on the alleged decline in the volume of work for the ACT Project to support the temporary retrenchment of respondents. Businesses, by their very nature, exist and thrive depending on the continued patronage of their clients. Thus, to some degree, they are subject to the whims of clients who may suddenly decide to discontinue patronizing their services for a variety of reasons.
Being inherent in any enterprise, employers should not be allowed to take advantage of this entrepreneurial risk and use it in a scheme to circumvent labor laws.
Otherwise, no worker could ever attain regular employment status. In fact, IKSI still continued its operations and retained several employees who were also working on the ACT Project even after the implementation of the January 2010 forced leave. Much worse, it continued to hire new employees, with the same qualifications as some of respondents, through paid advertisements and placements in SunStar Cebu, a local newspaper, dated Feb. 24, 2010 and March 7, 2010.
The placing of an employee on floating status presupposes, among others, that there is less work than there are employees. But if IKSI continued to hire new employees, then it can reasonably be assumed that there was a surplus of work available for its existing employees. Hence, placing respondents on floating status was unnecessary.
If any, respondents - with their experience, knowledge, and familiarity with the workings of the company - should be preferred to be given new projects and not new hires who have little or no experience working for IKSI.
There being no valid suspension of business operations, IKSI’s act amounted to constructive dismissal of respondents since it could not validly put the latter on forced leave or floating status pursuant to Article 301. And even assuming, without admitting, that there was indeed suspension of operations, IKSI did not recall the employees back to work or place them on valid permanent retrenchment after the period of six months, as required of them by law. x x x (Innodata Knowledge Services, Inc. v. Socorro D’Marie T. Inting, et.al., G.R. No. 211892, December 6, 2017).
The placing of an employee on floating status presupposes, among others, that there is less work than there are employees.