Published 24 December 2018, The Daily Tribune

Hiring the right employees can mean the difference between success and failure for most businesses. While new hires are subjected to recruitment and selection processes such as interviews and examinations, employers don’t really get to see the “whole picture” until the employees are seen in action. Thus, it makes perfect sense to make new employees undergo a probationary period to ensure that they are the right fit before making them regular employees. This does not only give employers a better chance of securing quality regular employees but also minimizes costs associated with the regularization of unfit employees.

On the part of the employee, the probationary stage of his employment provides him the opportunity to show to the employer that he has the required skills, talents, and other qualifications for the position he applied for and that he deserves to be regularized and receive all the benefits accorded to regular employees.

Given the importance of the probationary employment stage both for the employer and the employee, it is thus imperative for both parties to know the legal implications of probationary employment.

The law defines probationary employment as one 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 (Book VI, Rule I, Section 6 of the Implementing Rules and Regulations (IRR) of the Labor Code).During this trial period, the employer, on the one hand, is given the opportunity to observe the fitness of an employee while at work in order to ascertain the latter’s efficiency and productivity; on the other hand, the employee seeks to prove to his employer that he has the qualifications to meet the reasonable standards for permanent employment (St. Paul College Quezon City v. Ancheta, 2011).

Corollary thereto, the employer is made to comply with two (2) requirements when dealing with a probationary employee: first, the employer must communicate the regularization standards to the probationary employee; and second, the employer must make such communication at the time of the probationary employee’s engagement. If the employer fails to comply with either, the employee is deemed as a regular and not a probationary employee (Abbot Laboratories Philippines, et al. v Alcaraz, 2013).

In Abbot, the Supreme Court also held that an employer is deemed to have made known the standards that would qualify a probationary employee to be a regular employee when it has exerted reasonable efforts to apprise the employee of what he is expected to do or accomplish during the trial period of probation. This goes without saying that the employee is sufficiently made aware of his probationary status as well as the length of time of the probation.

As regards the length of time, Article 296 of the Labor Code sets a maximum allowable period within which the employer may subject an employee to a probationary period. The subject provision states that the “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.” An employee who is allowed to work after a probationary period shall be considered a regular employee. Note, however, that the six-month period provided in Article 296 admits of certain exceptions such as when the employer and the employee agree on a longer probationary period such as when the same is established by company policy or when the same is required by the nature of the work to be performed by the employee. Another exception would be a situation in which the employer and employee agree to extend the probationary period of employment beyond six months when the employee, at the end of the period, failed to qualify for in accordance with the standards for regularization. In Mariwasa Manufacturing, Inc. v Leogardo (1989), the employee failed to adequately comply with the standards for regularization. This notwithstanding, the employee was not dismissed and instead, the employer and employee extended by agreement the probationary period for another three months for the purpose of giving the latter a chance to improve his performance. Eventually, the employee was dismissed after the lapse of the extended period for failure to improve his performance. It was ruled that the employee could not subsequently claim regular status on the ground that the six-month period had already lapsed. By voluntarily giving his consent to the extension of the probationary period, the employee waived his right to question his dismissal should he fail to improve his performance to qualify him as regular employee. Such waiver is not prohibited by law or public policy. The act of the employer in extending the probationary period to afford the employee the chance to prove his worth as an employee is an act of liberality. Such 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. The law was never meant to produce such an inequitable result.

It must be noted, however, that a probationary employee, like a regular employee, enjoys security of tenure. He can also only be removed based on just or authorized causes of termination. Additionally, under Article 296 of the Labor Code, the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement.  When the probationary period is completed, the employer may: (1) regularize the probationary employee upon confirmation that said employee has successfully completed his/her probationary period; (2) extend the probationary period to allow the employee more time to meet the required standards; or (3) dismiss the employee for failure to qualify in accordance with the reasonable standards made known to him.

The above discussed legal implications must be clear to both the employers and probationary employees for them to know their main rights and obligations under a probationary employment contract. Happy probing and Merry Christmas!

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