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¬Ě, 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.

52 thoughts on “Probationary Employment

  1. susan

    What about if the employee is already working in the company for nine years and still the status is contractual, Is it illegal? If the employee is suppose to be a permanent one. In the event that the employee wants to resign will, the employee get a separation pay?

    Reply
  2. Javier

    Good morning. I may ask what happen when the employees finish one contract with 1 month notice but in the contract that he sign mention need 3 month notice ? But also in the contract don’t mention any clause which describes a penalty or sanction for this act.

    Thanks

    Reply
  3. CHE

    HI! Good afternoon! I just want to ask what is the ruling on probationary pertaining to their salary? My sister is connected with PNP, and her appointed was effective December 2014, but for 3 months period they havent received any salary. They were told that their probationary period is 3 months. They taught they would received their whole salary from December 2014-February 2015, but they are only paid the 1 month salary, 15th and 30th. And they were told that the whole amount due would be paid in June. Is that right? Because i also work in the government, my new employee under 3 mos probationary is already paid with their salary on 15th & 30th but through Disbursement voucher system and check. After 3 mos, they will now be included in our Payroll and their salary will be though ATM Account. Pls enlightment me about this. Thank you!

    Reply
  4. beth

    hello. I hope you can give light into this concern. I entered into a three month contract with a non-profit org as a field researcher. now the contract ends on may 12, 2015. my concern is I have accepted another job offer because the field researcher’s job does not require me to go to the office everyday. is it possible to end or cut my contract with my first work?

    Reply
  5. rommel

    hello! i hope you can give me an advice. i am currently working at this DASMARINAS (Cavite) based call center company since last October 2014.Unfortunately, due to some reasons, i have not yet completed the “bank requirements” so until now i don’t have an ATM and i am receiving my salary thru check. Because of this (according to what our HR told me), our main office, w/c is located in Pampanga , mailed my April 23 salary to my home address..which i haven’t receive till now. i already check our local post office yesterday but they told me, its not there yet.our water and electricity service was disconnected. and to top it all, i have a 1 month old baby. also, i can’t report to work because of lack of budget. before this, i’ve been absent only twice and entitled to a bonus (P10k-P20k) for hitting our “metrics” for this month. but i am about to loose it since 1 of the dis-qualifier is having 3 absent or more in a month. i really feel that what they did to is not right. please advice me. thank you and more power!

    Reply
  6. Lyn

    Hi sir,

    is it possible to renew the contract after 6 months, like he/she signed the 6 months contract and then the employer would like to continue his/her contract for another 6 months contract.

    Reply
  7. Marian

    Dear Sir,

    I got in as a regular item in a government institution since February 2015, on a probationary period for six months. It’s been more than three months and I haven’t received my salary yet. I follow-up on a regular basis, but the response is similar every time – no people to sign my papers, or there are a lot of papers (including mine somewhere) on this person’s desk; cashier office will just ring me once the papers are ready. At the moment, my pockets cannot afford to just wait for their call.

    By law, how long is the allowed duration for a new employee on probationary period to receive his/her salary? I failed to find an answer in the Labor Code of the Philippines. I just want to be informed so I can find a way to expedite the process.

    Thankfully yours,
    Marian

    Reply

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