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By: Atty Gerardo Maximo Francisco on April 30,2020

“A probationary employee or probationer is one who is on trial for an employer, during which the latter determines whether or not the former is qualified for permanent employment. Indeed, the employer has the right, or is at liberty, to choose who will be hired and who will be declined. As a component of this right to select his employees, 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.” (De La Salle Araneta University Inc. vs Magdurulang, 845 SCRA 274, 285 [2017])

While the law allows employers to require its new hires to undergo a probationary or trial employment period, the law does so subject to strictly enforced limitations.

Article 296 of the Labor Code mandates that “[p]robationary employment shall not exceed six months from the date the employee started working.” It should be noted that the probationary period is counted from the date the “employee started working” and not from the date of the employment offer letter, the date of signing or acceptance of that offer by the employee or even the employment commencement date stated in the employment contract (in cases where the employee actually started working prior to the stated commencement date).

Article 296 also states the legal consequence of allowing the agreed probationary period to lapse without action: “[a]n employee who is allowed to work after a probationary period shall be considered a regular [or permanent] employee.”

The probationary period, which must be stated in the employment contract, should therefore be strictly observed. In a case where the agreed probationary period is six months, the Supreme Court has ruled that this half-year period is equivalent to 180 days (Mitsubishi Motors Philippines Corporation vs Chrysler Philippines Labor Union, 433 SCRA 206, 218 [2004]). Supposing that an employee’s probationary employment began on Oct. 30, 2019, the probationary period does not end on April 30, 2020, but on April 27, which is 180 days counted from October 30.

It is not the case that an employer may dismiss a probationary employee for any reason (or at will) during the probationary period. Article 296 states that “[t]he 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.”

“If the employer fails to inform the probationary employee of the reasonable standards on which his regularization would be based at the time of the engagement, then the said employee shall be deemed a regular employee.” (Enchanted Kingdom Inc. vs Verzo, 777 SCRA 422, 437 [2015].)

“Moreover, while it may be argued that ideally employers should immediately inform a probationary employee of the standards for his regularization from day one, strict compliance thereof is not required. The true test of compliance with the requirements of the law is, of course, one of reasonableness. As long as the probationary employee is given a reasonable time and opportunity to be made fully aware of what is expected of him during the early phases of the probationary period, the requirement of the law has been satisfied” (Id., p. 441).

On March 30, 2020, the Department of Labor and Employment (DoLE) issued Labor Advisory 14, Series of 2020, titled “Clarification on the Non-inclusion of the One-month Enhanced Community Quarantine Period on the Six-month Probationary Period,” which says that “[f]or purposes of determining the six-month probationary period, the one-month ECQ…period is not included thereof.” The ECQ was declared on March 16, (effective March 17). Therefore, the days while the ECQ is in effect will not be counted in determining the probationary period. Using the previous example of a probationary period that commenced on October. 30, and assuming the ECQ will end for the employer on May 15, 2020, the end date of this employee’s probationary period will be on June 26.

The advisory covers all employers in the private sector and does not make any distinction between probationary periods of employees who are employed in essential or non-essential businesses or, if an employee is employed in a non-essential business, does not consider whether employees are allowed to work from home and may be evaluated.

While the original ECQ period was extended twice for certain areas, the advisory has not been supplemented to consider these extensions. Consequently, some doubts have been raised on whether the extensions should be included when counting the probationary period. A reasonable position would be that the extended ECQ periods should not also be counted in determining the probationary period because the same rationale for non-inclusion of the ECQ period in determining the probationary period applies to both the original and extended periods. To dispel doubt, especially in this period of uncertainty, it is hoped that the DoLE issues additional advice clarifying this matter.

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Euney Marie J. Mata-Perez

Mark Anthony P. Tamayo

Gerardo Maximo V. Francisco