What is a probationary employee?

A probationary employee is provided for in Article 281 of

the Labor Code of the Philippines:
Art. 281. Probationary employment. 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.
The Supreme Court has elaborated on what it means to
be a probationary employee:
A probationary employee, as understood under Article 282
(now Article 281) of the Labor Code, is one who is on trial
by an employer during which the employer determines
whether or not he is qualified for permanent employment.
A probationary appointment is made to afford the
employer an opportunity to observe the fitness of a
probationer while at work, and to ascertain whether he will
become a proper and efficient employee. The word
probationary, as used to describe the period of
employment, implies the purpose of the term or period but
not its length.
Being in the nature of a trial period the essence of a
probationary period of employment fundamentally lies in
the purpose or objective sought to be attained by both the
employer and the employee during said period. The length
of time is immaterial in determining the correlative rights of
both in dealing with each other during said period. While
the employer, as stated earlier, observes the fitness,
propriety and efficiency of a probationer to ascertain
whether he is qualified for permanent employment, the
probationer, on the other, seeks to prove to the employer,
that he has the qualifications to meet the reasonable
standards for permanent employment.
It is well settled that the employer has the right or is at
liberty to choose who will be hired and who will be denied
employment. In that sense, it is within the exercise of the
right to select his employees that the employer may set or
fix a probationary period within which the latter may test
and observe the conduct of the former before hiring him
permanently. [1]

What is the correct legal procedure for

terminating a probationary employee?
The scenario is of an employee who has not yet been
regularized. If, before the end of the probationary period,
the employer determines that the employee is not qualified
for permanent employment, how is his employment
terminated in accordance with legal due process?
he process actually begins early in the employment of the
probationary employee. It begins with informing the new
hire of the standards by which he is to be judged during
the probationary period. The Supreme Court discusses
this in Mercado vs. AMA Computer College-Paranaque
City, Inc., G.R. No. 183572, April 13, 2010, 618 SCRA
218:
Labor, for its part, is given the protection during the
probationary period of knowing the company standards
the new hires have to meet during the probationary period,
and to be judged on the basis of these standards, aside
from the usual standards applicable to employees after
they achieve permanent status. Under the terms of the
Labor Code, these standards should be made known to
the [employees] on probationary status at the start of their
probationary period, or xxx during which the probationary
standards are to be applied. Of critical importance in
invoking a failure to meet the probationary standards, is
that the [employer] should show as a matter of due
process how these standards have been applied. This is
effectively the second notice in a dismissal situation that
the law requires as a due process guarantee supporting
the security of tenure provision, and is in furtherance, too,
of the basic rule in employee dismissal that the employer
carries the burden of justifying a dismissal. These rules
ensure compliance with the limited security of tenure
guarantee the law extends to probationary employees.
Whereas a regular employee is typically entitled to the
two-notice requirement for his employment to be
[2]

terminated due to just cause, the process is different in the

case of a probationary employee dismissed because of his
failure to qualify as a regular employee in accordance with
reasonable standards made known to him at the time of
engagement.
n the case of Philippine Daily Inquirer vs. Leon M.
Magtibay, Jr., G.R. No. 164532, July 24, 2007, the
Supreme Court ruled that such a dismissal
… does not require notice and hearing. Due process of
law for this second ground consists of making the
reasonable standards expected of the employee during his
probationary period known to him at the time of his
probationary employment. By the very nature of a
probationary employment, the employee knows from the
very start that he will be under close observation and his
performance of his assigned duties and functions would
be under continuous scrutiny by his superiors. It is in
apprising him of the standards against which his
performance shall be continuously assessed where due
process regarding the second ground lies, and not in
notice and hearing as in the case of the first ground.
Due process for a probationary employee consists in
having informed him of the standards against which his
performance will be continuously assessed during the
probationary period.

hese work standards should be understood at the time of

his engagement and then, if he fails to meet these
standards, a written notice is served to the him by the
employer within a reasonable time from the effective date
of termination.
[3]

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]

This was upheld in Abott Laboratories vs. Alcaraz, G.R.

No. 192571, July 23, 2013:
A different procedure is applied when terminating a
probationary employee; the usual two-notice rule does not
govern. Section 2, Rule I, Book VI of the Implementing
Rules of the Labor Code states that “if the termination is
brought about by the x x x failure of an employee to meet
the standards of the employer in case of probationary
employment, it shall be sufficient that a written notice is
served the employee, within a reasonable time from the
effective date of termination.”

hile affirming that the two-notice rule does not apply to

probationary employees who are terminated for failure to
meet the employer’s standards, Abott Laboratories also
cautions employers to comply with their own internal
procedure in evaluating the performance of a probationary
employee. These policies are often found in the company
handbooks and in office memoranda circulated to the
employees. The reason is that company personnel
policies create a contractual obligation on the part of both
the employee and the employer to abide by the same.
Note that the reason for terminating a probationary
employee seems to make a difference to the Court. The
two-notice rule does not apply to probationary employees
terminated because of failure to meet the reasonable
standards made known to them at the time of
engagement. However, it still appears to be a requirement
for probationary employees terminated because of just
cause. It is thus important that the grounds for
[5]

termination are made clear during the termination, and

that documentation be meticulous throughout the process.