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The Law on Probationary Employment Part 2: Rights and a Practical Example

Rights of a Probationary Employee

Aside from the fact that a probationary employee can be dismissed for failing to reach the reasonable standard imposed by the employer, a probationary employee is entitled to all the rights of a regular employee. It is a common misconception that probationary employees are not entitled to security of tenure. While indeed they are not considered as regular employees, they are entitled to all the rights of an employee including the security of tenure as well as the mandatory contributions under special labor laws.[18] Similarly, they are entitled to holiday pay, overtime pay, 13th month pay as well as the standard working conditions guaranteed by the Labor Code.[19]

Moreover, given the nature of their probationary status, it is the duty of the employer to communicate the regularization standards to the probationary employee at the time of his engagement.[20] Aside from the fact that it is inequitable and arbitrary to expect an employee to meet a standard which he had not been acquainted to, the failure to state a probationary period and a reasonable standard for regularization implies that the employee is being hired on a regular basis.[21] However, it was held by the Court that when the job is self-descriptive in nature, as in the case of maids, cooks, drivers, or messengers, the reasonable standard for regularization need not be elaborated.[22]

Lastly, and most importantly, while a probationary employee may be validly dismissed for failure to meet the reasonable standards imposed by law, such power to dismiss must not be exercised in a capricious manner. The power to terminate must be exercised in accordance with the specific requirements of the contract.[23] 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.[24] Furthermore, there must be no unlawful discrimination in the dismissal.[25] However, in case of a dismissal for failure to conform to the standards of the employer, a probationary employee is not entitled to due notice and hearing.[26] It shall be sufficient that a written notice is served to the employee within a reasonable time from the effective date of termination.[27]

The Value of Knowing The Legal Precepts Behind Probationary Employment: A Practical Example

Mastering the legal foundations of a probationary employment is of fundamental importance. Not only does it save on cost, it emancipates the employer from workplace tension. Consider the 2018 case of Umali v Hobbywing Solutions Inc.[28] In that case, an employee was hired as a Pitboss Supervisor in an online casino gaming establishment.[29] The employee however accordingly never signed any employment contract before the commencement of her service but regularly received her salary every month.[30] 7 months after working with the company, she was accordingly made to sign two employment contracts - the first one for the period of 5 months antedating from the time she started working for the company to 5 months thereafter, and the second one for the period of 3 months commencing after the first 5-month contract, ending on February 18, 2013.[31] On February 18, 2013 however, she was told accordingly that her employment has already ended and to just wait for advice whether she will be rehired or regularized.[32] She was made to sign an exit clearance and was no longer deployed to work thereafter.[33]

The employer however argues that she was hired on a probationary basis for 5 months, which was extended for 3 months with the conformity of the employee.[34] Furthermore, having received a commendable rating by the end of the extended probationary period, she was accordingly offered regular employment by the company, which the employee however declined for personal reasons.[35]

The court ultimately accepted the narrative of the employee that the contract was only signed 7 months after her engagement since this was supported by documentary evidence.[36] Given that her initial probationary period went beyond 6 months, she became, by operation of law, a regular employee.[37] While indeed the 6 month probationary period may be extended, no such plausible ground for extension was offered by the company.[38] Consequently, the employee cannot be simply dismissed without a just or authorized cause and was awarded the twin relief of reinstatement and back wages.[39]

In Summary

Finding employees with the perfect capability for the post is already a challenge. Of greater concern however is the work attitude and fit in the company culture. Considering all these, it is but reasonable to afford an employer a chance to observe the work proficiency as well as the overall character of a newly hired employee.

However, it must be remembered that the law, being a social construct to render equity, strives to balance the right of the management with the right of the laborers. The right to observe newly engaged employees must not be exercised in an unreasonable manner so as to effectively deprive the workers of their right to security of tenure.


[18] Carvajal vs. Luzon Development Bank, G.R. No. 186169 (2012). [19] Art 82, PD 442. [20] Abbot Laboratories vs. Alcaraz, G.R. No. 192571 (2013). [21] ATCI Overseas Corp v CA, GR no 143949 (2001). [22] Abbot Laboratories vs. Alcaraz, G.R. No. 192571 (2013). [23] Tamson’s Enterprises Inc. vs. CA, G.R. No. 192881 (2011). [24] Id. [25] Id. [26] Philippine Daily Inquirer v MagtibayJr, GR No. 164532 (2007). [27] Abbot Laboratories vs. Alcaraz, G.R. No. 192571 (2013). [28] Umali v Hobbywing Solutions Inc., G. R. No. 221356 (2018). [29] Id.

[30] Id. [31] Id. [32] Id. [33] Id. [34] Umali v Hobbywing Solutions Inc., G. R. No. 221356 (2018). [35] Id. [36] Id. [37] Id. [38] Id. [39] Id.


You may contact the authors at:

Atty. Juan Miguel E. De Leon

Christian Andrew L. Gallardo

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