Probationary Employee who is Regular by Operation of Law

Probationary Employee who is Regular by Operation of Law

A probationary employee may be terminated on any of three (3) grounds. These are failure to qualify, just cause, and authorized cause.

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. [See 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.

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.

The Labor Code, as amended, provides, that 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.

In Dusit Hotel vs. Gatbonton [523 Phil. 338 (2006).], the Supreme Court (SC) reiterated that a probationary employee engaged to work beyond the probationary period of six months, as provided under Article 281 [now Art. 296] of the Labor Code, or for any length of time set forth by the employer (in this case, three months), shall be considered a regular employee.

Any circumvention of this provision would put to naught the State’s avowed protection for labor.

It is clear that the probationary employee becomes regular by operation of law if he is made to work beyond the 6 months of probation.

In the case of Umali vs. Hobbywings Solutions, Inc. [G.R. No. 221356, March 14, 2018] the company only evaluated the performance of the employee for the period of June 2012 to November 2013 on February 1, 2013, wherein she garnered a rating of 88.3%, which translates to a satisfactory performance according to company standards. At the time of the evaluation, the original period of probationary employment had already lapsed on November 18, 2012 and the employee was allowed to continuously render service without being advised that she failed to qualify for regular employment.

Clearly then, there is no reason to justify the extension since the employee had a commendable rating and, apart from this, there is no more period to be extended since the probationary period had already lapsed.

It bears stressing that while in a few instances the Court recognized as valid the extension of the probationary period, still the general rule remains that an employee who was suffered to work for more than the legal period of six (6) months of probationary employment or less shall, by operation of law, become a regular employee.

Being so, the SC held in the Umali case that In the instant case, there was no valid extension of the probationary period since the same had lapsed long before the company thought of extending the same.

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

Contract for Probationary Employment Monthly Paidprobationary contract

Get a complete package of probationary employment documents from employment contract, evaluation criteria, notices, etc. through the Super 5 Packet.

See also the Probationary Tabulation Metrics.

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