28 March 2024
28 March 2024
Probationary employment in the Philippines is a common practice among employers to assess the performance and suitability of newly hired employees before confirming them as regular employees. This guide aims to provide a thorough understanding of probationary employment, including its definition, duration, legal requirements, and the process of termination or completion.
Probationary employment is a time, starting from the engagement (start of the employment), when the probationary employee undergoes a trial period. During this time, the employer determines whether the probationary employee qualifies (and the probationary employee seeks to prove that they qualify) as a regular employee based on reasonable standards. These standards should be made known to the probationary employee at the time of engagement otherwise (if the standards are not made known to the probationary employee), the probationary employee will be deemed a regular employee.
It must be noted that the employer must decide whether to confirm the probationary employee as a regular employee at the end of the probationary period, and during the probationary period, the employee can only be dismissed for just or authorized causes (this is further discussed in section 6). On the other hand, the employee always has the right to resign if he feels that the job is not right for him after the end of the probationary period.
Probationary employees must receive the same treatment and benefits as regular employees performing similar work. They are entitled to statutory benefits such as Social Security System (SSS) contributions, PhilHealth, and Pag-IBIG Fund contributions.
The period for probationary employees should not exceed 6 months, which should be counted as 180 calendar days. Generally, if the probationary employee is allowed to work beyond the probationary period, then the probationary employee becomes a regular employee.
It must be noted that the law allows for a shorter or longer probationary period depending on the nature of the job or industry, as determined by the employer. This is illustrated by the examples in the succeeding paragraphs.
The employer and the probationary employee can agree for the probationary period to be longer than 6 months under the employment agreement especially if it is based on a company policy or when the same is required by the nature of the employee's job.
Note that probationary employment may also be extended in order to give the employee a chance to improve and further his prospects to demonstrate his fitness for regular employment. This is further discussed in section 6.3.
It is mandatory for employers to provide probationary employees with a written contract specifying the terms and conditions of their probationary employment, including the duration, job description, salary, and benefits. A primary example of such a written contract is a Probationary Employment Agreement.
A Probationary Employment Agreement is a contract between a new employee (the "probationary employee") and an employer. Like other employment agreements, it outlines the duties and responsibilities of the probationary employee for their employment. It also outlines the rights, compensation, and benefits of the probationary employee that arise out of their employment.
After the probationary period, an Agreement for Regular Employment can be used to outline the terms and conditions for regular employment if the employee qualifies as a regular employee as explained in Section 6.2.
One of the ways to ensure that the standards were made known to the probationary employee is to include the same in the Probationary Employment Agreement. Since the employment agreement will have to be read and signed by the probationary employee, they would be made aware of the standards for qualifying as a regular employee. On top of having the standards outlined in the employment agreement, the employer should also explain the same to the probationary employee at the time of engagement. This will allow the probationary employee to ask any questions or raise any concerns that they may have.
Having the standards outlined in the employment agreement can also serve as written proof that the standards for regularization were made known to the probationary employee at the time of their engagement.
Employers must establish clear and objective criteria for evaluating probationary employees (also called a performance evaluation). This ensures fairness and transparency in the assessment process.
Evaluation criteria for probationary employment encompass standards used by employers to assess probationary employees' performance, behavior, and suitability for regular employment. Criteria typically include job performance, attendance, adherence to company policies, interpersonal skills, initiative, adaptability, problem-solving abilities, and customer/client satisfaction. These metrics ensure fairness and transparency in evaluating probationary employees, aiding employers in determining whether to confirm them as regular employees or terminate their employment. Regular feedback and documentation of performance evaluations are crucial for tracking progress and making informed decisions.
Unlike probationary employees, regular employees can only be dismissed from employment for just and authorized causes under the Labor Code of the Philippines. Probationary employees, on the other hand, can be dismissed, not only for just and authorized causes such as poor performance, misconduct, or redundancy but also for failure to qualify as regular employees in accordance with reasonable standards that were made known to them at the time of engagement. For more information about the dismissal of both regular and probationary employees due to just and authorized causes, the following guide should be examined: Dismissing an Employee.
An End of Probation Notice can be used to inform the employee that he has failed to meet the standards of the employer after the evaluation of his performance at the end of the probationary period.
If the employment will no longer continue, an End of Probation Notice should not replace a termination letter as the employee must first be given the chance to defend himself after failing the employer's standards. After a reasonable time and giving the employee said chance, the employer can use an Employment Termination Letter to notify the dismissed employee of the fact of his termination. 10 days is considered reasonable under the law, but it may depend on the nature and circumstances of the employee's dismissal.
It must be noted that if the employer does not inform the employee beyond the probationary period that the employment is terminated due to the employee's failure to meet the employer's standards based on a performance evaluation, he is considered to be a regular employee.
Probationary employees who believe they have been unfairly terminated have the right to file an appeal or complaint with the Department of Labor and Employment (DOLE) for resolution.
At the end of the probationary period, if the probationary employee meets the employer's performance standards and requirements, they are typically confirmed as regular employees. The employer should issue a written notice of regularization, detailing the terms of employment moving forward. An End of Probation Notice can also be used to inform the employee that he has succeeded and is confirmed to be a regular employee.
In some cases, employers may extend the probationary period beyond the initial duration, provided that there is a valid reason for the extension and that such extension is made before the end of the probationary period. This should be communicated to the employee in writing, along with the revised duration and evaluation criteria. Such a valid reason is when the probationary employment is extended in order to give the employee a chance to improve and further his prospects to demonstrate his fitness for regular employment. This is another exception to the general rule that probationary employment should not exceed a period of 6 months.
When an employee is given another chance to prove that he can be regularized through an additional trial period then the performance of the employee at this new period should be in accordance with the evaluation criteria for regularization.
Probationary employment in the Philippines serves as a crucial mechanism for employers to evaluate the suitability of new hires while providing opportunities for employees to showcase their capabilities.
It is vital to know the duration of the probationary period which is 6 months and to know when it can be shortened and extended depending on the industry the employer is in as well as the nature of the employee's job. Further, it is important to inform the employee of the fact that he is a probationary employee at the time of his engagement, and if he fails to pass the standards of the employer, such failure must be based on a performance evaluation to determine the fitness of the employee to become a regular employee. It must be noted that a probationary employee becomes a regular employee after the end of the probationary period if he passes the performance evaluation and meets the employer's standards.
By understanding the legal requirements and processes involved in probationary employment, both employers and employees can navigate this period with clarity and fairness. Effective communication, clear expectations, and adherence to labor laws are essential for ensuring a smooth probationary period and fostering positive employer-employee relationships.