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.

83 thoughts on “Probationary Employment

  1. Rose

    Good Day!

    I Just want to ask if the training period can be included in the 6 months probationary period. is it legal if we give 2 months training period plus another 6 months probationary period. before he she will be qualified as a regular employee?

  2. John Louie

    Hi to all,

    I need advise. I am an employee of a BPO company here in Tarlac. I was transfered to a different line of business after being on bench for two months because I have suffered from sore eyes during the traiming period of my first account. The bench period was only supposed to be for 15 days and been extended up to two months without notice. Now that I started with my new account with new bosses pirated from a different company who dont know much yet about the process of disputes here, I have suffered from multiple salary disputes from my previous account to present, and raised it with them, but didnt get any. Most of my colleagues have their disputes running for months as well. I was promised and my disputes were approved to be credited on a specific date but still dont get any. So I raised the concern again and I was embarassed how they asked me how much am I disputing. I told them that I will file for complaint with nlrc if I didnt get any resolution for mh issues. Then I still didnt get any, so since most of my colleagues have the same issue, I ask who will join me to nlrc through chat, then when they found out, they took a screen shot and right there and then ask me to log out and never talk to anyone and sent me home without having me sign anything by the orders of the account manager. I felt its wrong for them to do that. So can anyone tell what’s the right thing to do now?it is just today :'(

  3. Erika

    What if you are a graduate of 2 year course with diploma. And then the company have been very restrict on any employee should have a diploma of 4 year course. But why they have given me a chance to join the company if my credentials are not fit? I am now on my 4th month as probationary. I was wondering what will happen to my contract? Am i going to be fired or they will extend my probationary period until i complete your 4 year course?

  4. Anonymous

    Good day po sir, is it right po ba if an employee was hired for a probationary period of 6 months, pero 3rd month pa lang po, hinulog na po sya sa evaluation, without discussing or evaluating the employee? In the situation we had po, my husband was evaluated without discussion by the immediate superior to him, or even giving reminder or warning to change or improve his work (July hired, before end September po evaluation). He was formerly employed in the sister company for 8 years prior to his employment to the second company. Please enlighten us. Maraming salamt po.


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