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.

37 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?

  6. 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?

  7. 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.

  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. 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?

  10. 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

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

    Hi Sir,

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

  12. 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.

  13. 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

  14. 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…

  15. 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

  16. 16 Joy2009 Sep 3rd, 2009 at 3:55 pm

    Hi

    I’m on my sixth month.When I went to the office to work.They just told me that I am terminated na daw! I did not receive any notification or kung ano ang grounds ko.

    Thanks

  17. 17 cindy090709 Mar 9th, 2010 at 8:07 am

    im 182 days with my employer yesterday (march 08, 2010)..my sup told me that im a regular employee by default coz im more than 6 months..she informed me, with that status ill be given another 2 months to prove myself.. i must admit that my scores were really low.. if in case my scores will not go up, she told me that i may be transfered to another department or be terminated…is it legal to extend another months for a full regularization & can they still terminate me if i will not get higher scores coz im regular employee by default?..
    your help will be gladly appreciated..many thanks..

  18. 18 arjaybriol@yahoo.com May 14th, 2010 at 8:31 am

    good day sir,
    Im rj i become a probitionary this last march 28,2010 as a company guard and so on this last may 5,2010 i was in my post the hr manager call me to there office and telleng me that i was early endo she said that the president wanted to endo me because he dont want my performance.is that fair for me as a probitionaty to early endo on very early without telleng or giving me a warning about my performance?

  19. 19 zarahhaze Jun 3rd, 2010 at 5:05 pm

    hello sir!
    i am thankful i found your site. i really need legal advice.i have just dismissed from work, actually 11 of us. now, we think the grounds thrown to us are unfair because some of our colleagues have the same grounds but they still remain in the institution… some of those grounds are the ff: 1.) we are not yet married, 2.) we are not yet finished with our masters degree, and some do not start schooling yet. i have been a contractual employee in the institution for 2 years, continues contract for 2 years, all is contractual. Every semester, we just renew our contract. Now, the administration fired us out on the last day of our contract without any notice that they won’t renew our contract for the next school year. they just told us that they won’t renew our contract for the first semester of the next school year with those grounds and just come back if we comply all those grounds. we have asked advice from DOLE and they passed us to the NLRC. We are advice to file illegal dismissal and backwages, and we did so. Now, i want to ask if we have fight on the case since we are only contractual.
    Thank you! i will be waiting for your response on this matter! God bless!!

  20. 20 HRM Oct 21st, 2010 at 10:52 am

    Hi Sir,

    Can I use the sample above, “ex gratia” to extend one of our employees probationary period to another 3 months? We did an assessment on his 5th month and another one on his 6th month. Still, we can’t tell or decide and we feel the time is not enough to determine if he is fit or not to be a regular employee.

    Many thanks.

  21. 21 mitch Apr 7th, 2011 at 10:50 am

    Hi Sir,

    Good day!

    Im an ESL Teacher who works in Japanese company here in Cebu. I would like to ask about my regularization rights, because just this month i signed a regularization contract but the problem is that my basic pay is still the same as my probationary pay. My questions are: Is it stated in the regularization law that as a regular employee my salary should increase? If it will how much percentage will it be? and if the company will not agree on it what legal actions should i take?

    Please do help me in, i really am not knowledgeable about our law.

    Thank you very much and more power

  22. 22 wifey Jun 4th, 2011 at 12:47 pm

    Hi, Sir. I would like to seek advice regarding this matter that our family is currently undergoing. My husband was diagnosed with severe obstructive sleep apnea and is currently undergoing treatment for his condition. This means that he involuntarily dozes off during daytime(daytime fatigue). Unfortunately, this has been affecting his work badly. He is on his 5th month of probationary period at this certain company. He was advised by their HR personnel to make a letter of appeal on why they should retain my husband in the company and continue with the rest of his probationary status. I guess his co-workers and bosses thinks that him dozing off means that he is slacking off. My question is, is it legal for the company to terminate his employment based on their perception that he is incompetent. We have necessary documents to support that his episodes of “sleeping at work” is due to his sleep apnea and we’re currently doing something about it(meaning spending a big amount of money on the treatment). Based on his productivity, he is doing well, but he believes that this is overshadowed by the fact that some people in his office would see him doze off (note: my husband received several merit awards from his previous employer despite him having this condition). Is there a law here in the Philippines protecting people with sleep apnea against discrimination and unjust termination? I believe in the US there are certain laws pertaining to the protection of laborers diagnosed with sleep disorders such as this. Thank you very much.

  23. 23 keikei Oct 3rd, 2011 at 7:51 am

    Good day!

    Is it a valid memo if you are warned thru e-mail? No printed papers and signature or so and no verbal agreement between employer and employee regarding that.
    Let’s say the company policy indicated that an employee is only allowed a maximum of 3 memos, what if those so-called memo’s were only sent thru e-mail, wasn’t even discussed. The employee just received it and the employer didn’t even require a feedback or at least an acknowledgement that the employee has received it and that he/she noted it or understood why he/she received that email.
    What if the employee already received that kind of mail 3x, does the employer have the right to terminate the employee under those circumstances?

  24. 24 reka Jan 2nd, 2012 at 8:34 am

    Hi Sir!

    Could you please give me an advice on my current employment situation? I’m exactly on my 5th month of my probationary period today, Jan. 2, 2012, and on this same day, I decided to give a letter to inform my employer that I’ve decided to extend my service to the company up until the end of my probationary contract only, Feb. 2,2012. (My last month will also serve as my 30 days turn over period.)
    My question is: if ever my employer does not accept my letter of intent to end contract, do they still have a hold on me even after the end of my probationary contract expired? My immediate superior told me that there is a difference between a probationary contract and the typical 6 month non-probationary contract.

    I hope you could help me on this. Thanks! :)

  25. 25 laishetemasu Jan 8th, 2012 at 12:26 am

    Hi Sir,

    I am working in a call center company for more than 180 days or six months,my rating did not pass the required score to become a regular employee and I have not signed an agreement that I will be given and extension if ever I will not pass the required score.Is it true that I am already considered a regular employee?If I was just given an extension what should be the correct process?

  26. 26 ABDONICHIE Jan 13th, 2012 at 4:03 pm

    Gudevning Sir..

    I am a probationary employee and has worked for a certain company for 2 months and I decided to resign. Right now, the company is holding my salary.. Is it right for them to do that? Could I demand for my salary?
    Am I required to stay for at least one month?or would a 2-week notice be enough?

  27. 27 rahsc_07 Jan 14th, 2012 at 3:53 pm

    Contract Terminated by Employer.

    A new employee has been hired by an outsourcing company (employer) and been handed out to our client.

    After a week, he/she was forced by my employer to resign because of the skills did not fit on the project said by the client.

    Factors to consider:
    1. He/she passed the interview made by the employer
    2. He/she passed the interview made by the client

    Another issue was the schedule.

    The employer and the employee agreed that there will be no Sunday work during the interview and before signing the contract. The employer told the employee that there will be Sunday work but it will be a rare case and it can be arranged with the client Team Lead if the schedule was appointed to him/her, by swapping.

    After the client orientation to the employee on the 2nd day. The schedule agreement was not mentioned to the client by the employer. Then the next day, the client decided to report the issue to the employer.

    The employer decided to wave the contract and pay the employee amounting half month of his/her salary. And will provide a Quit Claim to be signed before giving the money.

    Can you please help the employee with this case?

  28. 28 Rannie Jan 24th, 2012 at 6:46 am

    From what I’ve read so far, from this blog site as well as other online sources, probationary status can indeed be extended, but only if notice is duly given prior to expiration of the six-month probationary period, NOT after it has expired. The head of our HR, a lawyer, says that that provision of the “Herrera Law” covers only rank-and-file employees, not officers. Therefore, officers can be terminated anytime. Is that statement factual or accurate? Thanks!

  29. 29 michael paul Feb 23rd, 2012 at 9:56 am

    I’m an employee at an English language school. I have been working in this academy for 1 year and 2 months.The last time i signed my contract was in November 2011. The said contract only lasted for 2 months, that is, from November until the end of December. After the end of the contract, the company did not let me sign another new contract. However, the company wanted me to sign a new contract after one and a half months without any further explanations.Instead, I was verbally notified by my Head teacher that I wouldn’t be able to receive my salary if I didn’t sign the said contract. Despite that fact, I did not sign a new contract. My questions now are; first, Am I already considered as a regular employee in this company?(knowing that I’ve already been working for more than a year). Second, Is there a strong possibility that the company will terminate my status since i did not sign a new contract? Third, What advice could you give me?

  30. 30 will Apr 30th, 2012 at 11:20 am

    management staff

    question? an employee was hired as team leader in a call center and he/she signed a job offer stated as probationary for 3 months, and in a snap of finger without any evaluation and not given period of time, to proven themselves that they are fit and meet the company standard was fired because of impression as per employer. Is that valid to terminate his/her employment? what steps do we need to do first?
    —————————–
    agent staff

    And one more thing with about their agents was detained for 45 mins because they cannot go until they signed the training agreement which is supposed to be given on the job offer itself and that will bind the contract and the job offer. the employee already done with their training they are already dialing on the floor and if they made mistake on the spot they are fired and scorted to hr for clearance.

  31. 31 will Apr 30th, 2012 at 11:23 am

    please email me the response willy_4you@yahoo.com

  32. 32 will Apr 30th, 2012 at 11:30 am

    management staff

    question? an employee was hired as team leader in a call center and he/she signed a job offer stated as probationary for 3 months, and in a snap of finger without any evaluation and not given period of time, to proven themselves that they are fit and meet the company standard was fired because of impression as per employer. Is that valid to terminate his/her employment? what steps do we need to do first?
    —————————–
    agent staff

    And one more thing with about their agents was detained for 45 mins because they cannot go until they signed the training agreement which is supposed to be given on the job offer itself and that will bind the contract and the job offer. the employee already done with their training they are already dialing on the floor and if they made mistake on the spot they are fired and scorted to hr for clearance.

  33. 33 valski Apr 30th, 2012 at 1:06 pm

    hi sir, my son just went through a 6 months probationary period and recently been regularized. accordingly, the seniority of employment is reckoned from the very first day of his probationary period. during his regular status, his salary was increase from 265 to 270 with 5.00 difference. is he entitled to a differential back wages 6 months prior to his regularization since his employment is reckoned from day one of his probationary.

    please advice. thanks and much appreciated

  34. 34 Peaches May 18th, 2012 at 2:27 pm

    Hi Atty.

    I am nearing the end of my 6 months probationary period. However, I do not wish to renew my contract with them (even if they offer regularization). Do I need to write a formal notification on my 5th month? I am worried that if I don’t notify them they would tell me to serve another 30-days for turn-over.. I am willing to finish my contract with them but do not wish to extend.

    Also, since I just worked for them for 6-months, will I be able to get the taxes which they witheld along with my final pay?

    Thanks!

  35. 35 asher_chelle85 Jan 5th, 2013 at 3:22 pm

    Would you mind to enlighten me on this one.

    There was employee given 3 mos probationary period. He was not given any notices that his probi will end soon, but he was still working in the company. May i ask if that employee will be considered as a regular employee?

    If the company will still make another extension of his probationary even if it was a few days late will it be legally valid?

    Is there any way on how to make the employee continue working as a probationary at least for another 3 mos? thanks

  36. 36 Anne Aug 19th, 2014 at 5:57 pm

    I have signed a probationary contract for 5 months. I am already on my 7th month of employment and no evaluation nor contract extension has been made. Does this means that I am already a regular employee? Please advise. Thanks a lot!

  1. 37 “At-Will” Employment and Due Process in Labor Law at Philippine e-Legal Forum Pingback on Jun 30th, 2011 at 5:52 pm

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