How to Terminate a Probationary Employee

How to terminate a probationary employee? This stumps most HR practitioners and business owners.

Should the company observe the 30-day notice rule? Should DOLE be informed of said termination? What procedure and justification should be used?

The post below is based on the book Guide to Valid Dismissal of Employees Second Edition by Atty. Elvin B. Villanueva.

Article 296 [formerly Article 281] of the Labor Code (re-numbered per RA 10151 – See Labor Code 2018 Edition by Atty. Villanueva) provides that the services of an employee who has been engaged on a probationary basis may be terminated 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.

What the law requires in this case insofar as due process is concerned is for an employee to be apprised beforehand of the conditions of his employment and of the terms of advancement therein.[1] No hearing is required in this case.

A probationary employee may be dismissed for failure to qualify based on the reasonable standards made known to him at the time of his engagement. Let us say the probationary employment contract stipulates that the employee shall be rated on the first three months of his probationary period and that in each month he should obtain a rating of at least 85% to be regular. If he fails in any of the month, he can be dismissed for failure to qualify.

In dealing with probationary employee for failure to qualify two requirements must be satisfied:[2]

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 comply with either, the employee is deemed as a regular and not a probationary employee.[3] The basis of this doctrine is Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor Code stating that if the employer fails to inform the probationary employee of the reasonable standards upon which the regularization would be based on at the time of the engagement, then the said employee shall be deemed a regular employee, viz.: “(d) 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.”[4]

[1] Sameer Overseas Placement Agency, Inc. vs. NLRC, G.R. No. 132564, October 20, 1999.

[2] See Abbott Laboratories Philippines, et. al. vs. Alcaraz, G.R. No. 192571, July 23, 2013.

[3] Abbott Laboratories Philippines, et. al. vs. Alcaraz, G.R. No. 192571, July 23, 2013.

[4] Ibid.

The sample notice of termination due to failure to qualify shown below is based on the book Human Resource Forms, Notices and Contracts Vol. 2

Form No. 153 Notice of Dismissal – Failure to qualify

To : Name of Employee

From : Human Resources Manager or other authorized officer

Subject : Failure to qualify

Date : (Date of issuance of Notice)

This refers to the review of your performance as a probationary employee for the position of ___________________, which probationary period is set to expire on ___________.

Before the commencement of your employment with the company on __________, the terms of your probationary employment including the performance standards expected of you, were explained clearly by your immediate supervisor, ______________.

On _____________, your immediate supervisor conducted a performance review which measured certain factors such as quality of work, job knowledge and attendance. Based on the results of the said review, you obtained low scores on _________________, __________ and _____________, which produced a total score below the minimum score required for regular employment.

Your immediate supervisor explained the results of the said review in a meeting held on _________________. Attached is a copy of your performance review showing your scores, your immediate supervisor’s remarks and recommendation.

After a thorough review and discussion on the matter, we regret to inform you that the results of your performance review clearly show that you have failed to qualify for regular employment based on performance standards made clear to you before you started your probationary employment.

Your employment is hereby terminated effective on the closing hours of ____________ (must be before the end of the probationary period). Please comply with the relevant post-employment requirement of the Company by surrendering your accountabilities to _________________ (department or officer) for the Company to process your final salary.

Very truly yours,

__________________

(Name and signature of authorized signatory)