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.

101 thoughts on “Probationary Employment

  1. Gretchen

    Hi Sir! I been with my employer for 10mos. 6mos is my probationary period. After 6 mos. I didnt signed a new conract its either extend my probationary period or im a regular? i also dont have sss, philhealth. Since im absent for 6days due for fever, i just heard that they are hiring for my replacement. Can u give some advice?

    Reply
  2. butternut

    Hi,

    what if my proby contract ako..at my naka lagay na 50k banned kasi sinagot nila pamasahe ko and all in. Pero di naman sasapat sa 50k un..panu kung ng ka allergy ako sa work location due to water.?pwede ba ko umalis kahit na ka contract?and ndi original ung sign ko?

    thanks.

    Reply
  3. Vada

    Question… My Boss did not regularize me but I know it to be personal because few months back he wanted me to resign forcing me too he said he is for sure that I wont be regularized so my 6th month came and he ended my contract not informing me my stats were failing he never coached me or supervised me… He bullys me and he talks about me to other managers he embarrassed me several times at work… Is this constructive dissmisal??

    Reply
  4. Melanie

    Happy Day!

    what are the documents that need to be signed by an employee if he already ended his contract?

    Reply
  5. Raymond

    Pa√†no po kung higit na 1 year sa company at wala pa ring pinapipirmahan sa regularization at wala din pong pinirmahan at the start of day one sa work? Need some advice po…

    Reply
  6. Tomas D.

    What is stated in the law about the salary of employee from probisionary to a permanent employee,should the salary have to increase?

    Reply
  7. Bim

    Sir,

    I just want to ask if a Probationary Employment Contract is required in order for a probationary period of employment to be effective?

    Thank you.

    Reply
  8. AIRCRAFT MECHANIC C

    Hi,

    Good Day! I’m already a regular employee of an Airline company since 2011, previously holding the position of Aircraft Mechanic C, and recently been promoted for the next higher position – Aircraft Mechanic B (because of an audit finding within the company – due my current responsibilities do not match my current position. This promotion was supposed to be given 3-4 years back.) The problem is I feel used, because I was promoted only to reflect in our current roster that there is enough Aircraft Mechanic Bs within the company to sustain the airline’s operation and mainly to clear the audit findings. My salary remains as an Aircraft Mechanic C and was advised that I am under probationary period of 6 months before the salary adjustments would take effect. Could this be possible? Any legal penalties for the company?

    thanks!

    Reply

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