Probationary Employment Contract Sample 2

Probationary employment arises 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. (See Tamsons Enterprises, Inc. vs. CA, G.R. No. 192881, November 16, 2011)

The post below is based on the book Human Resource Forms, Notices and Contracts Volume 1 by Atty. Elvin B. Villanueva

The probationary employment is intended to afford the employer an opportunity to observe the fitness of a probationary employee while at work, and to ascertain whether he will become an efficient and productive employee. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other hand, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. Thus, the word probationary, as used to describe the period of employment, implies the purpose of the term or period, not its length. (Magis Young Achievers Learning Center v. Manalo, G.R. No. 178835, February 13, 2009, 579 SCRA 421, 431-432, citing International Catholic Migration Commission v. NLRC, 251 Phil. 560, 567 (1989).)

See Sample Computation of Ratings Based on the Contract below (Link will soon be made available).

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 a probationary period shall be considered a regular employee. (Article 295, Labor Code as re-numbered)

Probationary employment may be extended by mutual agreement of the parties.

In one case, the Supreme Court ruled that by voluntary agreeing to an extension of the probationary period, the employee in effect waived any benefit attaching to the completion of said period if he still failed to make the grade during the period of extension. The Court finds nothing in the law which by any fair interpretation prohibits such waiver. And no public policy protecting the employee and the security of tenure is served by proscribing voluntary agreements which, by reasonably extending the period of probation, actually improve and further a probationary employee’s prospects of demonstrating his fitness for regular employment. (See Mariwasa Manufacturing, Inc., et al. vs. Hon. Leogardo Jr., et al, 169 SCRA 465.) See Sample Contract of Mutual Extension of Probationary Period (Link will soon be made available).

An employee who fails to meet the standards for regularization may be terminated for failure to qualify. See Sample Termination of Probationary Employee

More on Guide to Valid Dismissal of Employees

See discussion on Forms of Employment in the Philippines

Sample Form – Contract for Probationary Employment

CONTRACT FOR PROBATIONARY EMPLOYMENT

KNOW ALL MEN BY THESE PRESENTS:

This CONTRACT FOR PROBATIONARY EMPLOYMENT (Agreement for brevity), is entered into this ____ day of___________ by and between:

XXXX______________________________, a corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines and with principal place of business at D. Majanap Calsada St., Asanaba 2, Makati City, herein represented by its HR Manager, CON TRATIS TA, and hereinafter referred to as the “EMPLOYER”;

-and-

1. PERS JOB, of legal age, Filipino, with residential address at __________________________, and hereinafter referred to as “PROBATIONARY EMPLOYEE”;

WITNESSETH THAT:

WHEREAS, the EMPLOYER is in need employee who will start out as a probationary employee;

WHEREAS, the PROBATIONARY EMPLOYEE seeks employment, applied for and expressed willingness to join the EMPLOYER as its temporary worker;

WHEREAS, the agreement shall be based on probationary status for six (6) months where regularization of the employee shall be conditioned upon her meeting the standards made known to her at the time of her engagement;

THEREFORE, the parties hereby covenant:

COMMENCEMENT OF PROBATIONARY EMPLOYMENT

1. The PROBATIONARY EMPLOYEE is engaged as _________________________________ with duties and responsibilities set forth hereunder subject to provisions on pre-conditions, meeting of performance standards and other lawful causes for termination of relationship under the law;
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 8:00 a.m. shall be reckoned as tardy and any end of shift earlier than 5:00 p.m. shall be considered undertime, both of which shall be subject to corresponding salary deduction and disciplinary action;
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 period of six (6) months or until _______________ unless sooner terminated for cause or failure to qualify as set forth hereunder;
4. The probationary employment shall be conditioned upon the following:

• Accuracy of the information provided by the PROBATIONARY EMPLOYEE either in writing or verbally;
• Truthfulness of any testimonial submitted in writing;
• Undertaking that the PROBATIONARY EMPLOYEE is free from any contractual restriction or employment relationship;
• Medical fitness to be employed;

5. Any violation of the provisions of paragraph 4 hereof and its subsections shall be deemed breach of the conditions for probationary employment and is ground for the automatic revocation of this contract;
6. In the event of revocation of this agreement on account of violation of Section 4 and its subsections, the employee shall reimburse the EMPLOYER of any and all damages arising from falsity or untruthful information and sickness at an amount to be determined by the EMPLOYER but shall not less than three (3) months salary equivalent. Pending determination of the final amount, the PROBATIONARY EMPLOYEE authorizes the EMPLOYER to withhold whatever earned salary to answer for any such liabilities and to apply the same as soon as the final amount is duly determined;

EXTENSION OF PROBATIONARY EMPLOYMENT

7. During her probationary employment, the PROBATIONARY EMPLOYEE shall undergo monthly evaluation of her performance based on reasonable standards made known to her at the time of her engagement;
8. In the event that the PROBATIONARY EMPLOYEE fails to meet the standards mentioned, her employment shall be terminated on the ground of failure to qualify. The termination shall take effect after seven (7) calendar days from receipt by the PROBATIONARY EMPLOYEE of the notice of failure to qualify;
9. The EMPLOYER may extend the probationary status of the PROBATIONARY EMPLOYEE for another period set forth in the contract of extension subject to which the PROBATIONARY EMPLOYEE expressly agrees. The extension shall not be construed as an extension of satisfactory service but a humanitarian gesture for the benefit of the PROBATIONARY EMPLOYEE and to give him a chance to perform and meet the EMPLOYER’s standards;

JUST AND AUTHORIZED CAUSES FOR DISMISSAL OR TERMINATION

10. In addition to failure to qualify, the PROBATIONARY EMPLOYEE may also be dismissed from service for just causes found under Article 282 [now Art. 297 per RA 10151 and DOLE DA 01, Series of 2015] of the Labor Code, as amended and other applicable provisions of the law;
11. The employment may likewise be terminated for authorized cause under Articles 298 and Article 299 of the Labor Code, as amended or any other relevant provisions;
12. Further, the employment may be terminated in the event of violation by the PROBATIONARY EMPLOYEE of the provisions of the Code of Conduct hereto attached as Annex “A”. The PROBATIONARY EMPLOYEE undertakes that she has read and understood the provisions therein and were fully explained to her in language and/or dialect that she understands and agrees to abide thereto;
13. Employment may likewise be validly terminated if the business operation has ceased on account of a law, rules or regulations ordering the cessation of the company;
14. The employment may likewise be suspended due to causes arising from lack of raw materials, lack of customer order, declining sales, among others as determined by the management;

PLACE OF POSTING

15. The initial place of posting of the PROBATIONARY EMPLOYEE shall be in the principal office of the EMPLOYER. However, the PROBATIONARY EMPLOYEE agrees to be assigned anywhere in the Philippines when the exigencies of business require or when required by the project secured by the EMPLOYER;
16. The place of work may change when the EMPLOYER moves to another principal place of business and in such case, the PROBATIONARY EMPLOYEE agrees to relocate;

DUTIES AND RESPONSIBILITIES

17. The PROBATIONARY EMPLOYEE shall perform duties and responsibilities hereto attached as Annex “B,” and such other responsibilities that may be assigned relevant thereto;
18. In addition, the PROBATIONARY EMPLOYEE shall observe the law, rules and regulations, standards of fairness, justice, good customs and fair play in the discharge of her duties;
19. In the performance of her duties, the PROBATIONARY EMPLOYEE shall be evaluated to determine her fitness for the position as a regular worker. The following standards weight shall be used to ascertain whether she would qualify as a regular employee:

• Performance 30%
• Punctuality/Attendance 20%
• Behavior 20%
• Teamwork 20%
• Initiative 10%

20. The total weight is 100%. If the PROBATIONARY EMPLOYEE receives a total weight below 85% it shall be deemed as failure to meet the standards which may be ground for dismissal based on failure to qualify;
21. Performance metrics representing 30% of the total weight shall be based on the following:

• Business knowledge 20%
• Output/production 50%
• Resourcefulness 20%
• Teamwork 10%

22. Punctuality/attendance shall be 20% subject to deduction of 3% for every instance of tardiness and 4% for every instance of absence. Absence due to medical reason shall be supported with notarized medical certificate and for other reasons a sworn statement of the fact of absence and affidavits of disinterested persons. Failure to produce said documents and records within two (2) days from absence shall be deemed unauthorized absence;
23. Behavior shall be 20% subject to deduction for every citation or violation of company rules, to wit:

• Written warning – less 2%
• Stern warning –           less 5%
• Written reprimand – less 6%
• 1-day Suspension – less 7%
• Longer suspension – less 10%

24. The PROBATIONARY EMPLOYEE is expected to be a team player and work in coordination with other employees. A teamwork rating shall be made by his immediate superior based on the result of the latter’s interview or assessment of the feedback of other employees or team members, as the case may be;
25. The rating for Initiative shall be given by the immediate superior based on how the PROBATIONARY EMPLOYEE acts on tasks on his own without any express direction by the superior bearing in mind the goals and objectives of the company;
26. Based on the above standards, the PROBATIONARY EMPLOYEE shall be rated monthly. If she fails to meet a single month, it shall be considered as ground for termination for failure to qualify unless extended for another month by the EMPLOYER for humanitarian consideration. The extension shall not be construed as proof of meeting of standards, rather as an act of compassion;

COMPENSATION AND BENEFITS

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27. The PROBATIONARY EMPLOYEE shall receive a salary of FOUR HUNDRED FIFTY SIX PESOS (PHP456.00) per day which will be paid every 15^th and 30^th or 31^st, as the case may be, of each month subject to the following payroll cut-off period;
28. For the payroll period of 15^th of the month, attendance cut-off shall be until the 5^th of said month. While for the payroll period of 30^th of the month, the cut-off shall be from the 6^th of the month until 20^th thereof;
29. The salary of the PROBATIONARY EMPLOYEE shall be deducted an amount representing her contribution to social legislation benefits such as SSS, Pag-Ibig and Philhealth. He is likewise entitled to 13^th month pay provided she has served at least one (1) month of service;
30. The compensation and benefits are customized for each employee. Thus, the PROBATIONARY EMPLOYEE undertakes to treat with strict confidentiality her compensation and benefits information. She shall refrain from discussing with anyone whether connected with the EMPLOYER or not. Violation of this prohibition shall be considered as ground for disciplinary action and shall affect the behavior rating stated above;

OFFICE DECORUM

31. The PROBATIONARY EMPLOYEE shall report for work in proper business attire. The following are prohibited office attire:

• Slippers
• Sando
• T-shirt
• Shorts
• Jeans of any color
• Sleeveless blouse

CONFIDENTIALITY

32. The PROBATIONARY EMPLOYEE recognizes and acknowledges that the systems that the EMPLOYER owns, holds in trust, develops, plans whether for its own use or by its clients are confidential in nature and are property of the EMPLOYER. She further acknowledges that to enable the EMPLOYER to perform services for clients, the latter may have furnished the EMPLOYER confidential information concerning their business affairs, property transactions under consideration (including identities of their companies that are or may be parties to such transactions), methods of operation or other data that the goodwill afforded to EMPLOYER depends upon, among other things;
33. Thus, the PROBATIONARY EMPLOYEE agrees that, except as directed by the EMPLOYER in writing, she will not at any time, whether during or after employment, disclose to any person or use any confidential information, or permit any person to examine and/or make copies of any documents which contain or are derived from any confidential information whether prepared by the EMPLOYER or coming into the possession of the PROBATIONARY EMPLOYEE directly or by reason of her job;
34. The term “confidential information” shall include all information, whether written or oral, that is not known by, or not generally available to, the public at large and that concerns the business, activities, financial affairs, trade secrets, technology of the EMPLOYER or otherwise relates to the EMPLOYER, in any manner whatsoever, its customers, their clients, suppliers and other businesses or entities, with whom the EMPLOYER does business which may come to the possession of the PROBATIONARY EMPLOYEE during the tenure of employer in whatever manner or reason;
35. 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;
36. Failure of the PROBATIONARY EMPLOYEE to submit, turnover, or return the company property falling under confidential information, as demanded in writing, within five (5) days therefrom, shall be deemed as violation of the confidentiality clause;
37. In case of violation, the PROBATIONARY EMPLOYEE agrees to compensate the EMPLOYER the amount equivalent to three months’ gross salary by way of liquidated damages or at a higher amount as may be established by the EMPLOYER at its option;
38. The PROBATIONARY EMPLOYEE authorizes the EMPLOYER to apply whatever salary earned or accruing to her as compensation for the violation and to withhold any amount pending actual application. Clearance shall not be issued until settlement of said accountability and other liabilities is made;

NON-COMPETE CLAUSE

39. The PROBATIONARY EMPLOYEE agrees and covenants within a period of two (2) years after the termination of this agreement, engage, directly or indirectly or through any corporations or associations, in any business, enterprise or employment which directly competes with the business of the EMPLOYER or any of its customers;
40. 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;
41. If the PROBATIONARY EMPLOYEE would in the future be directed by any governmental agency or judicial forum or court or asked to testify in any proceeding concerning any matter learned in the course of services provided to or on behalf of the EMPLOYER, she shall notify the latter before making any disclosure at least ten (10) days prior the date of testimony, hearing or disclosure;
42. In the event of any breach of the non-compete clause, the PROBATIONARY EMPLOYEE shall compensate the EMPLOYER the amount equivalent to three months’ gross salary by way of liquidated damages or a higher amount as may be proven by the EMPLOYER at the latter’s option;
43. Payment of liquidated damages shall in no way affect the other rights which the EMPLOYER may have against the PROBATIONARY EMPLOYEE, especially the right to obtain injunctive relief against her;

TRAINING EXPENSES

44. The PROBATIONARY EMPLOYEE understands and acknowledges that during the probationary period, the EMPLOYER is subjecting her 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;
45. 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 her 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;
46. If the PROBATIONARY EMPLOYEE resigns without observing the 30-day prior notice she shall reimburse the EMPLOYER the total amount of ONE HUNDRED THOUSAND PESOS (PHP100,000.00) representing cost of training and liquidated damages. To effect the payment, the PROBATIONARY EMPLOYEE authorizes the EMPLOYER to withhold whatever salary and/or benefits earned and apply the same against the liability;
47. 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 Project Employment consisting of three (3) 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____