The Law on Probationary Employment (Part 1)

“The sun himself is weak when he first rises, and gathers strength and courage as the day gets on.”

- Charles Dickens, The Old Curiosity Shop

Hiring and engaging an employee in a workplace entails major consequences both in the perspective of business and law. Considered as the most important asset of a company, a single employee can positively affect or disrupt work culture. The level of enthusiasm and eagerness of an employee to work can alter the entire work environment.

Legally, a regular employee can only be dismissed for just and authorized causes under the Labor Code.[1] An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.[2] Given such ramifications, employers tend to hire employees initially on a probationary status. While probationary employees are also entitled to security of tenure, they can be dismissed for another cause - the failure to meet the reasonable standards made known to them at the time of their engagement.[3]

Defining Probationary Employment There is probationary employment where the employee upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement.[4] The word “probationary” therein implies the purpose of the term, and not the length of employment.[5] During the probationary period, the employer is afforded an opportunity to observe the fitness, propriety and efficiency of an employee to ascertain whether he is qualified for permanent employment.[6] This is based on the principle of management prerogative to hire employees.[7]

Period of Probationary Employment

Under the Labor Code, probationary employment shall not exceed 6 months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period.[8] This period is reckoned from the date of employment up to the same calendar date of the six month following.[9]

The 6 month period prescribed in the Labor Code is only the maximum period imposed by the law. The employer is at liberty to set a probationary period shorter than the 6 month cap.[10] Generally however, this 6 month period is not extendible. To do so would sanction a mechanism to avoid regular employment. However, in one case, the Court allowed the extension of the probationary period beyond 6 months “when the same is established by company policy or when the same is required by the nature of work to be performed by the employee.”[11] Accordingly, it takes about 18 months before the probationary employee’s worth as a telephone sales representative can be fully evaluated since it is only then that sales reports are ripe for dissemination and evaluation.[12] Hence, it is only reasonable, due to the nature of the work, to permit the extension of the probationary period in order to allow the employer to fully evaluate whether the telephone operators have met, or surpassed, the sales quota.[13] Additionally, the Court mentioned that the 18 month probationary period is recognized by the Collective Bargaining Agreement with the company union.[14]

Another case allowing the extension of the probationary period beyond 6 months justifies it on the ground of “liberality” on the part of the employer to afford the employee a second chance to make good after initially failing the evaluation.[15] Accordingly, there is nothing in the law which prohibits the waiver of the period of probationary employment especially when it is done for furthering the prospects of an employee to attain regular employment.[16]

Note however that the cases abovementioned provide the exceptions to the general rule of the 6 month probationary period. Without such justifying circumstance, allowing a probationary employee to work beyond 6 months shall bestow upon him regular employment.[17]


References

[1] Art. 279, Labor Code of the Philippines, PD 442. [2] Id. [3] Id. Art 281. [4] Tamson’s Enterprises, Inc. vs. CA, G.R. No. 192881 (2011). [5] Id. [6] Id. [7] Cebu Marine Beach Resort et al., v. NLRC, etc. al., G.R. No. 143252 (2003). [8] Art 281, Labor Code of the Philippines, PD 442, as amended. [9] Alcira vs. NLRC, et. al., G.R. No. 149859 (2004). [10] Universidad De Sta. Isabel vs. Sambajon Jr., G.R. Nos. 196280 & 196286 (2014). [11] Buiser vs. Leogardo, G.R. No.L-63316 (1984). [12] Id. [13] Id. [14] Id. [15] Mariwasa Manufacturing Inc. vs. Leogardo, Jr., G.R. No. 74246 (1989). [16] Id. [17] Umali v Hobbywing Solutions, G.R.No.221356 (2018).


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You may contact the authors at:

Atty. Juan Miguel E. De Leon

migs.deleon@paladinslaw.org


Christian Andrew L. Gallardo

andrew.gallardo@paladinslaw.org

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