PROBATION

ARY
EMPLOYEME
NT

Labor Standards and Welfare

written output
James L. Decolongon
Probationary employee is one who is under observation by an employer to
determine whether or not he is qualified for permanent employment.

Article 295 - 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 probationary period
shall be considered a regular employee.

Important points of Article 295:

Shall not exceed 6 months

Maybe terminated for:

1.
2.

Just cause or authorized causes of termination

Failure to qualify as a regular employee based on a reasonable
standard made known by the employer to the employee at the
time of engagement

Shall be considered as Regular employee after probationary period

First point: Shall not exceed 6 months Probationary period

Probationary period is considered as Trial period
WHY?
The essence of a probationary employment fundamentally lies in the
PURPOSE or SOUGHT TO BE ATTAINED by the employer and the employee.

(Purpose or Objective)
- Efficient
- Productive
- asset and not liability

Employers right to select; the need for probation

Liberty to choose in good faith who will be hired and who will be denied
employment
Right to set or fix a probationary period to test and observe the conduct of
the probationary employee before hiring him permanently
If the purpose and object sought by the employer is neither attained nor
attainable during probation, the employer may terminate it.

Probationary employment must be expressly agreed, otherwise, the

employment is considered REGULAR.

Case:
A.M. Oreta and Co., Inc. vs. NLRC (G.R. no. 74004, August 10, 1989)
In all cases involving employee engaged on probationary basis, the
employer shall make known to the employee, at the time he is hired, the standards
by which he will qualify as a regular employee. Absent these requisites, there is
justification in concluding a person was a regular employee at the time he was
dismissed by the company.

Second point: Termination

Are probationary employees entitled to security of tenure?

YES! Limited tenure

The security of tenure shall be the period within which the probationary employee
shall render the service agreed upon.
Thus, only for just or authorized cause as provided by law or under employment
contract, a probationary employee can be terminated.

GROUNDS FOR TERMINATION:

1. Just cause or authorized causes of termination
(Just cause)
a. Article 282 Termination by employer
(Authorized causes)
a. Article 283 Closure of establishment and reduction of personnel
b.
Article 284 Disease as ground for termination

2. Failure to qualify as a regular employee based on a reasonable

standard made known by the employer to the employee at the time
of engagement
3. Management prerogative (Must be based on reasonable standard)

LIMITATIONS TO TERMINATION OF PROBATION:

1. It must be exercised in accordance with the specific requirements of the
contract
2. If a particular time is prescribed, the termination must be within such time
and if formal notice is required, then that form must be used
3. The employees dissatisfaction must be real and in good faith, not feigned so
as to circumvent the contract or the law
4. There must be no unlawful discrimination

Case:
A.M. Oreta and Co., Inc. vs. NLRC (G.R. no. 74004, August 10, 1989)
In all cases involving employee engaged on probationary basis, the
employer shall make known to the employee, at the time he is hired, the
standards by which he will qualify as a regular employee. Absent these
requisites, there is justification in concluding a person was a regular employee at
the time he was dismissed by the company. As such, he is entitled to security of
tenure during his period of employment. His services cannot be terminated
except for just cause and authorized causes enumerated under the Labor code.

Is it proper to reinstate a probationary employee?

Yes!
The court ruled that Article 279(now293) providing for reinstatement applies
even to a probationary employee unjustly dismissed; hence, reinstatement is
the proper relief. However, the relations between the parties are so strained
that separation pay in lieu of reinstatement should be instead granted.

Third point: Shall be considered as Regular employee after

probationary period
Art. 295(now 281)
An employee who is allowed to work after probationary period shall be
considered a REGULAR employee.
General Rule:
Probationary period shall not exceed 6 months
Exceptions:
1. Parties to an employment contract may agree on the extension of the period

1.1 When it is established by a company policy, a policy from the DOLE, or in

a CBA
1.2 Required by the nature of work to be performed by the employee
Cases:
Mariwasa Manufacaturing, Inc. vs. Leogardo Jr. (G.R. no. 74246, January
26, 1989)
The extension of Dequilas probation was ex gratia, an act of liberality on the
part of the employer affording him a second chance to make good after having
initially failed to prove his worth as an employee.
By voluntary agreeing to an extension of the probationary period, Dequilla in
affect waived any benefit attaching to the completion of said period if he still failed
to make the grade during the period of extension.

Buiser, et al. vs. General Telephone Directory Co. (G.R. no. L-63316, July,
31, 1884)
Generally, the probationary period of employment is limited to six (6)
months. The exception to this general rule is When the parties to an employment
contract may agree otherwise, such as 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. In the latter case, there is recognition of the exercise of managerial
prerogatives in requiring a longer period of probationary employment, such as in
the present case where the probationary period was set for eighteen (18) months,
i.e. from May, 1980 to October, 1981 inclusive, especially where the employee must
learn a particular kind of work such as selling, or when the job requires certain
qualifications, skills, experience or training.
The practice of a company in laying off workers because they failed to make
the work quota has been recognized in this jurisdiction. (Philippine American
Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634, 639). In the case
at bar, the petitioners' failure to meet the sales quota assigned to each of them
constitute a just cause of their dismissal, regardless of the permanent or
probationary status of their employment. Failure to observe prescribed standards of
work, or to fulfill reasonable work assignments due to inefficiency may constitute
just cause for dismissal. Such inefficiency is understood to mean failure to attain
work goals or work quotas, either by failing to complete the same within the alloted
reasonable period, or by producing unsatisfactory results. This management
prerogative of requiring standards availed of so long as they are exercised in good
faith for the advancement of the employer's interest.