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 the 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.

36 Responses to “Probationary Employment”


Pages: « 3 2 [1] Show All

  1. 15 peach Aug 13th, 2009 at 7:40 pm

    Hello! I hope you can enlighten me on the matter and give me advice. I have been a probationary employee for almost 11 months. I understand that proby period is only upto 6 months. The company has mentioned for a need to extend three months because of the world crises. We agreed to do so but after 3 months, our evaluation has not even been done. Last June, my 9th month in the company, I filed a sick leave because I had to go for check up and the doctor advised me for 1 day rest although she advised me to be admitted in a hospital. I should have started enjoying the regular benefits since May but my salary was deducted for two days absence and I lost my incentives for the month June. Where shall I bring my case? Thanks

  2. 14 jam09 Jul 16th, 2009 at 8:55 am

    Gud afternun sir,

    I just want to ask if there is a law saying that living allowance of employees are taxable of 15% same us our monthly salary or even worst. I also want to know if the law about probationary employee is just the same with contractual employee? wherein since we are continuously serving in the same school (I am a teacher), minimum of 1 school year, does it mean we should be considered as regular? How come majority of us are still contractual even we are already serving for years. Lastly, I just want to ask if the city government has a right to change the date of implementation of the increase in salary announce in the news that it should start this July..

    I hope sir you can help me with this matter. I don’t know a lot about the law or about my rights.

    Thanks…

  3. 13 xriz8 Jun 20th, 2009 at 6:30 am

    Hi Sir,

    May I ask, being a probationary employee, in regular holiday such as Independence Day.

    Should the employer pay us even we dont report to the office?

    Thanks and regards

  4. 12 saikeo Jun 17th, 2009 at 7:57 am

    hi sir,

    wat if in case of signing of a probationary contract and the employee decides to resign with reasonable grounds e.g. health reasons, is he liable for any bridge of contract? i’ll wait for your response sir. pls email it to yellowgirlofmarch@yahoo.com. tyank you very much sir.

  5. 11 vjdaria16 Aug 8th, 2008 at 12:55 pm

    Hi Sir,

    Are probationary employees entitled to a separation pay?
    Thank you so much..

  6. 10 YnaCM Jul 24th, 2008 at 7:10 am

    Hi Sir,

    I would like to seek for legal advice regarding my current situation.

    I have been with my current company for eight months already. The first six months were under probationary status and I was given another contract to sign for regularization. I have tendered my resignation already which will be effective on my 9th month.

    My concern is related to my leave credits.

    According to our handbook,

    * Upon regularization, an employee would have earned SL days with Pay of 1.25 days by the number of months’ probationary period. (e.g., 1.25 days x 6 months = 7.5 days).

    * Upon regularization, an employee would have earned VL days with Pay of 1.25 days by the number of months’ probationary period. (e.g., 1.25 days x 6 months = 7.5 days).

    However, our admin officer informed me just recently that this particular provision in our handbook was overlooked and is due to be changed.

    According to him, we are due to acquire leave credits upon our regularization. If this happens, the number of leave credits that I have now, after 8 months of working for them (10 SL and 10 VL) will be substantially reduced to only 2.5 VL and 2.5 SL.

    My question now is this, is it legal for the company’s management to institute such change (especially diminishing the benefits which they have put in place and was oriented to us since the first day of our employment)? As an employee, what legal protection do I have against such unfair practices?

    I hope you can give light to my questions.

    Thanks in advance,
    YnaCM

  7. 9 ladyanned Jun 18th, 2008 at 3:32 pm

    can a probationary employee who has not yet signed a contact of employment but only a verbal agreement be terminated without just cause?

    is he entitled for a security of tenure even without a written contract?

    is he entitled to be given the standard to be followed to be a regular employee?

    employer is not deducting benefits like sss philhealth. pag ibig and withholding tax. what will be the remedy of employee?

  8. 8 zfxhras Feb 23rd, 2008 at 7:07 am

    the actual probationary period of 5 months would remain so regardless of the length of evaluation periods therein. in addition, the employer has the prerogative to vary the evaluation period from a 3-month first evaluation period to a 2-month second evaluation to fit the probationary period.

    evaluation does not determine how long a probationary would be. an employer may evaluate monthly, every 2 months, twice, or about the end of the probationary period.

  9. 7 zfxhras Feb 23rd, 2008 at 6:59 am

    with regards to the renewal of a 6 mo contract with another 6 month contract, that would depend on the contracted work are exactly the same in both contracts.

    if the contracted work is much the same in both contracts, it will not qualify as a project contract but would indicate that the work contracted with is an essential work in the company that is supposed to be manned by a regular employee. ergo, the second contract becomes a run-around on the part of the company from placing the “contractual employee” into the regular employee roll, which violates the labor laws.

    if the contracted work in either contract is distinct from each other, the second 6-month contract is a valid project contract and is allowed in the labor laws and jurisprudence.

  10. 6 bok Jan 26th, 2008 at 4:28 am

    Sir,

    Supposed one was employed on the following conditions:

    >Probationary period is 5 months as stated in the contract.

    >Performance evaluation covering 3-months employment was conducted by the employer.

    Further,
    >After 3 months, result of evaluation was disclosed to the employee.

    >On the release of the evaluation result, there was no accompanying notice of action whether the probationary period would be extended or would be immediately ended.

    >1 month later, employee was notified with a specific date of termination of employment.

    >From the start of employment up to termination of employment, it is in total 4 months.

    Now, if probationary period is the period in which “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”, doesnt this imply that performance evaluation should be done at the END of the probationary period?

    Also, if the evaluation period only covers a 3-month period as opposed to the 5-month period specified in the contract, does this mean that in ACTUALITY the probationary period is just 3 months?

    And, if actual probationary period is just 3 months, and employee’s service was enagaged by the employer 4 months, doenst this construe that employee worked beyond his probationary period, and was in effect already a regular employee on his 4th month?

  11. 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?

  12. 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.

  13. 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?

  14. 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.

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

    Hi Sir,

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

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