Probationary Employment

Who is a probationary employee?

A probationary employee is one who, for a given period of time, is being observed and evaluated to determine whether or not he is qualified for permanent employment. A probationary appointment affords the employer an opportunity to observe the skill, competence and attitude of a probationer. The word “probationary”, as used to describe the period of employment, implies the purpose of the term or period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer at the same time, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. (Escorpizo vs. University of Baguio Faculty Education Workers Union, G.R. No. 121962 [1999])

What is the governing law?

Probationary employment is governed by Article 281 of the Labor Code, which reads:

ART. 281. Probationary Employment. - Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

What are the grounds for terminating a probationary employee?

Article 281 states that a probationary employee can be legally terminated: (1) for a just cause; or (2) when the employee fails to qualify as a regular employee in accordance with the reasonable standards made known to him by the employer at the start of the employment. The limitations in dismissing a probationary employee are:

First, this power must be exercised in accordance with the specific requirements of the contract.

Second, the dissatisfaction on the part of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law;

Third, there must be no unlawful discrimination in the dismissal.

New Case

In the recent case of Dusit Hotel Nikko vs. Gatbonton (G.R. No. 161654, 5 May 2006), the Supreme Court found that the employer failed to present proof that the employee was evaluated or that his probationary employment was validly extended.

In this case, the employee was hired for a 3-month probationary period (the period provided by law is six months, but this may be shortened or, in appropriate cases, extended by agreement between the employer and the employee). For its defense, the employer claimed that the 3-month probationary employment was extended for another 2 months because the employee was not yet ready for regular employment. The employer presented, as proof, a Personnel Action Form containing the recommendation.

However, the Supreme Court noted that the Personnel Action Form: (1) was prepared on only in the fourth month, well after the 3-month period provided under the contract of employment; (2) the recommended action was actually termination of probationary employment, and not extension of probation period; (3) the action form did not contain the results of the respondent’s evaluation; (4) the action form spoke of an attached memo that allegedly contains the recommendation for extension, but the memo was not presented; (5) the action form did not bear the respondent’s signature.

Therefore, in the absence of any evaluation or valid extension, there is no basis to show if the employee indeed failed to meet the standards of performance previously set.

Effect of validly terminating a probationary employment

At the expiration of the probationary period, the status of the employee becomes regular. Since te employee in the Dusit Hotel Nikko case was not dismissed for a just or authorized cause, his dismissal was illegal, and he is entitled to reinstatement without loss of seniority rights, and other privileges as well as to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

May a probationary employment be extended?

In Mariwasa Manufacturing, Inc. vs. Leogardo (G.R. No 74246, 26 January 1989), the Supreme Court stated that the extension of the probationary period was ex gratia, an act of liberality on the part of the employer affording the employee a second chance to make good after having initially failed to prove his worth as an employee. Such an act cannot unjustly be turned against said employer’s account to compel it to keep on its payroll one who could not perform according to its work standards. By voluntarily agreeing to an extension of the probationary period, the employee in effect waived any benefit attaching to the completion of said period if he still failed to make the grade during the period of extension.

You may also want to read these related posts:

Christmas Bonus vs. 13th Month Pay by Atty. Leo on November 10th, 2006

Indigent or Pauper Litigant: Rules in Determining Status by Atty. Fred on November 14th, 2006

Theory of Relativity by jlp on July 23rd, 2006

5 Responses to “Probationary Employment”


  1. 1 pax2006 Oct 20th, 2007 at 9:15 pm

    Hi Sir,

    Is the issuance of memo with out verbal warning makes it illegal?

  2. 2 Atty. Fred Oct 23rd, 2007 at 8:34 pm

    pax, depends on what kind of memo and the procedure under the company’s code of conduct, if any.

  3. 3 lex Nov 21st, 2007 at 6:52 pm

    if a person is offered a job stating that he’ll receive a salary of Pxxxxx.xx that his pay grade is a managerial pay grade level but he’s on probationary for 6 months and the job offer states that he has many benefits including allowances and xx number of days of vacation leave per year WITHOUT stating the effectivity of all these benefits, when is the legal effectivity of the said benefits?

  4. 4 Atty. Fred Nov 26th, 2007 at 6:39 pm

    Lex, I got this nagging feeling that this relates to an actual contract (with, of course, an actual employer). Imagine what will happen if that employer happens to be our client. =) In any case, a contract has to be considered in totality, which means that each provision has to be referenced to the others. We can’t do that unless we see the contract.

  5. 5 vfdivinof Nov 27th, 2007 at 12:11 pm

    not related to probationary employment but nonetheless, i just need to know that if a person has signed a 6 mo contract, then afterwards, is offered a renewal contract and signs it, does his/her status still remains contractual?



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