Probationary Employee may Become Regular from Day One

A probationary employee is one who is placed on trial by an employer, during which the latter determines whether or not the former is qualified for permanent employment. [Canadian Opportunities Unlimited, Inc. v. Dalangin, Jr., 681 Phil. 21, 33 (2012), citing International Catholic Migration Commission v. NLRC, 251 Phil. 560 (1989)]

By virtue of a probationary employment, an employer is given an opportunity to observe the fitness and competency of a probationary employee while at work. During the probationary period of employment, an employer has the right or is at liberty to decide who will be hired and who will be denied employment. [Moral vs. Momentum Properties Management Corporation, G.R. No. 226240, March 06, 2019.]

The essence of a probationary period of employment lies primordially in the purpose or objective of both the employer and the employee during such period. While the employer observes the fitness, propriety, and efficiency of a probationary employee, in order to ascertain whether or not such person is qualified for regularization, the latter seeks to prove to the former that he or she has the qualifications and proficiency to meet the reasonable standards for permanent employment.

As a general rule, probationary employment cannot exceed six months. Otherwise, the employee concerned shall be regarded as a regular employee. Moreover, it is indispensable in probationary employment that the employer informs the employee of the reasonable standards that will be used as basis for his or her regularization at the time of his or her engagement.

In the event that the employer fails to comply with the aforementioned, then the employee is considered a regular employee. [Philippine National Oil Company-Energy Development Corporation v. Buenviaje, 788 Phil. 508, 529 (2016)]

A probationary employee enjoys security of tenure, although it is not on the same plane as that of a permanent employee. Other than being terminated for a just or authorized cause, a probationary employee may also be dismissed due to his or her failure to qualify in accordance with the standards of the employer made known to him or her at the time of his or her engagement.

Hence, the services of a probationary employee may be terminated for any of the following: (1) a just cause; (2) an authorized cause; and (3) when he or she fails to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer.

In connection with the abovementioned, Section 6(d), Rule I, Book VI, as amended by Department Order No. 147-15, of the Omnibus Rules Implementing the Labor Code of the Philippines (Labor Code) provides that in all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee.

In other words, the employer is mandated to comply with two requirements when dealing with a probationary employee, viz: (1) the employer must communicate the regularization standards to the probationary employee; and (2) the employer must make such communication at the time of the probationary employee’s engagement.

If the employer fails to abide by any of the aforementioned obligations, the employee is deemed as a regular, and not a probationary employee. An employer is deemed to have made known the regularization standards when it has exerted reasonable efforts to apprise the employee of what he or she is expected to do or accomplish during the trial period of probation.

The exception to the foregoing is when the job is self-descriptive in nature, such as in the case of maids, cooks, drivers, and messengers.

The following are sample probationary employment contracts which can help HR practitioners, business owners, and managers craft with ease:

1. Daily Paid in English
2. Monthly Paid in English
3. Daily Paid in Filipino / Tagalog

Below is an excerpt of the sample probationary contract template providing for the suggested standards:

CONTRACT FOR PROBATIONARY EMPLOYMENT

KNOW ALL MEN BY THESE PRESENTS:

         This CONTRACT FOR PROBATIONARY EMPLOYMENT is entered into by and between

                  XYZ Corporation, a corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines with principal place of business at 123 Bldg., Ayala Ave., Makati City, Philippines, represented herein by its President, MR. ____________________, hereinafter known as EMPLOYER,

-and-

1. ________________________, of legal age, and a resident of _____________________________________________, hereinafter called the PROBATIONARY EMPLOYEE,

WITNESSETH THAT:

WHEREAS, the EMPLOYER is in need of employee who will xxx;

WHEREAS, the PROBATIONARY EMPLOYEE seeks employment, applied for and xxx;

WHEREAS, the agreement shall be based on probationary status for a maximum period of xxx;

THEREFORE, the parties hereby covenant:

COMMENCEMENT OF PROBATIONARY EMPLOYMENT

1. The PROBATIONARY EMPLOYEE is engaged as xxx;

2. The PROBATIONARY EMPLOYEE shall report for work on or before 8:00 a.m. and leave not earlier than 5:00 p.m., Monday to Saturday. Any entry later than xxx;

3. The hiring date of the PROBATIONARY EMPLOYEE, which is the commencement of this agreement shall be on __________. The probationary status shall be for a maximum period of xxx unless sooner xxx;

4. The probationary employment shall be conditioned upon the following:

xxx

5. Any violation of the provisions of paragraph 4 hereof and its subsections shall be deemed breach of xx;

6. In the event of revocation of this agreement on account of violation of Section 4 and its subsections, the employee shall reimburse xxx;

7. During the course of employment the PROBATIONARY EMPLOYEE shall render full-time service and shall not engage in any moonlighting xxx.

EXTENSION OF PROBATIONARY EMPLOYMENT

8. During probationary employment, the PROBATIONARY EMPLOYEE shall undergo monthly evaluation of performance based on reasonable standards made known at the time of engagement;

9. In the event that the PROBATIONARY EMPLOYEE fails to meet the standards mentioned, in any of the month xxx failure to qualify;

10. The PROBATIONARY EMPLOYEE agrees that the EMPLOYER may extend xxx;

JUST AND AUTHORIZED CAUSES FOR DISMISSAL OR TERMINATION

11. In addition to failure to qualify, the PROBATIONARY EMPLOYEE may also be dismissed from service for just causes found under Article 297 xxx;

12. The employment may likewise be terminated for authorized cause under Articles 298 and Article 299 of the Labor Code, as amended xxx;

13. Further, the employment may be terminated in the event of violation by the PROBATIONARY EMPLOYEE of the provisions of the Code of Conduct. The PROBATIONARY EMPLOYEE undertakes xxx;

14. Employment may likewise be validly terminated if xxx;

15. The employment may likewise be suspended due to causes arising from xxx;

PLACE OF POSTING

16. The initial place of posting of the PROBATIONARY EMPLOYEE shall be xxx;

17. The place of work may change when xxx;

DUTIES AND RESPONSIBILITIES

18. The PROBATIONARY EMPLOYEE shall perform duties and responsibilities hereto attached as Annex “A,” and such other responsibilities that may xxx;

19. In addition, the PROBATIONARY EMPLOYEE shall observe the xxx;

20. In the performance of duties, the PROBATIONARY EMPLOYEE shall be xxx:

20.1  Performance                 30%

20.2  Punctuality/Attendance 20%

20.3  Behavior                       20%

20.4  Teamwork           20%

20.5  Initiative                       10%

21. The total weight is 100%. If the PROBATIONARY EMPLOYEE receives a total weight below 85% it shall be deemed as failure to xxx;

22. Performance metrics representing 30% of the total weight shall be based on the following:

22.1  Business knowledge               20%

22.2  Output/production                 50%

22.3  Resourcefulness                     20%

22.4  Teamwork                    10%

23. Punctuality/attendance shall be xxx;

24. Behavior shall be 20% subject to deduction for every citation or violation of company rules, to wit:

24.1  Written warning            –        less 2%

24.2  Stern          warning      –        less 5%

24.3  Written reprimand        –        less 6%

24.4  1-day Suspension –        less 7%

24.5  Longer suspension        –        less 10%

25. The PROBATIONARY EMPLOYEE is expected to be a team player and xxx;

26. The rating for Initiative shall be xxx;

27. Based on the above standards, the PROBATIONARY EMPLOYEE shall be rated monthly. If he/she fails to meet the standard in a single month, it shall be xxx;

COMPENSATION AND BENEFITS

28. The PROBATIONARY EMPLOYEE shall receive an NCR-based wage of ________________________ PESOS (PhP______.00) per xxx.

Xxx

CONFIDENTIALITY

33. The PROBATIONARY EMPLOYEE recognizes and acknowledges that the systems that the EMPLOYER owns, holds in trust, develops, xxx;

34. Thus, the PROBATIONARY EMPLOYEE agrees that, xxx;

35. The term “confidential information” shall include all xxx;

36. The PROBATIONARY EMPLOYEE undertakes not to make copies or duplicates of any confidential information or other sensitive property or materials mentioned, including but not limited to keys, access cards, diskettes, flash drives, electronic files programs, databases regardless of storage location, photographs or such other proprietary information relating to the EMPLOYER’s business;

37. Failure of the PROBATIONARY EMPLOYEE to submit, xxx;

38. In case of violation, the PROBATIONARY EMPLOYEE agrees to compensate the EMPLOYER the amount equivalent to xxx;

39. The PROBATIONARY EMPLOYEE authorizes the EMPLOYER to apply whatever salary earned or accruing to him/her as compensation for the xxx;

NON-COMPETE CLAUSE

40. The PROBATIONARY EMPLOYEE agrees and covenants within a period of two (2) years after xxx;

41. The PROBATIONARY EMPLOYEE shall not, during the same period directly or indirectly solicit to provide or provide, without the prior written consent of the EMPLOYER, any professional services for anyone who is a client of the EMPLOYER;

42. If the PROBATIONARY EMPLOYEE would in the future be directed by any governmental agency or judicial forum or court or asked to testify xxx;

43. In the event of any breach of the non-compete clause, the PROBATIONARY EMPLOYEE shall xxx;

44. Payment of liquidated damages shall in no way affect the other rights which the EMPLOYER may have xxx;

TRAINING EXPENSES

45. The PROBATIONARY EMPLOYEE understands and acknowledges that during the probationary period, the EMPLOYER is subjecting him to training relating to product knowledge, operation, skills, strategies, techniques using materials, documents, equipment, device, technology, among others which the EMPLOYER has invested and which the latter spent for incurred expenses;

46. Thus, the PROBATIONARY EMPLOYEE shall remain with the EMPLOYER during the entire probationary period of six (6) months to fully satisfy the cost of training. In case of resignation, the PROBATIONARY EMPLOYEE shall notify the EMPLOYER in writing at least thirty (30) days prior to the effective date thereof by serving in person to his immediate superior a hard copy of the resignation letter. The thirty (30) days shall be counted from the actual receipt of said hard copy document;

47. If the PROBATIONARY EMPLOYEE resigns without observing the 30-day prior notice she shall reimburse the EMPLOYER the total amount equivalent to xxx;

CONSENT UNDER DATA PRIVACY LAW

48. By providing personal information and sensitive personal information, the employee acknowledges and recognizes the exclusive right of the company to utilize the data for xxx;

49. This written contract and its annexes constitute the entire agreement between the parties binding between them and their assigns, heirs and successors-in-interest;

IN WITNESS WHEREOF, the parties have hereby affixed their respective signature this ____ day of _______, 20____, in the City of ____________.

For the EMPLOYER:

______________________   _____________________

President                      PROBATIONARY EMPLOYEE

Signed in the presence of:

__________________________    _________________________

ACKNOWLEDGMENT 

Republic of the Philippines     )

City of _______________      ) S.S.

 

         BEFORE ME, a notary public for and in the City of ______________, the parties appeared and presented their respective identification cards as competent proof of identity and are known to me and to me known to be the same persons who executed the foregoing Contract for Probationary Employment consisting of seven (7) pages, including this page where the Acknowledgment is written and affirmed to me that the same is their own, free, voluntary act and deed.

          WITNESS MY HAND AND SEAL, this _____ day of __________, 20____.

 

Doc. No.: _________;

Page No.: _________;

Book No.: _________;

Series of 20____”