No job security for probationary employees

Published by rudy Date posted on May 19, 2011
Dear PAO,
I was hired as a supervisor in a manufacturing company here in Batangas early this year under probationary status. We were actually 2 supervisors hired at the same time.
After 5 months and 2 weeks, we were informed by the admin manager that our contract ended and we will not be considered as regular employees. We were informed only on our last day, which means we were not informed earlier or we were caught by surprise. In addition, my immediate superior was not informed.
During our employment, there had been no case filed against us and we did not violate any company rule. We were informed that we did not meet the standards of the top management, but we think the reason is shallow and there was no due process.
We would like to ask if we can file a case against our former employer. What is our chance of winning?
Dear Fernan,
A probationary employee is one who is employed merely on a trial basis 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 or not he will become a proper and efficient employee. This was what the Supreme Court pronounced in the case of International Catholic Migration Commission vs. National Labor Relations Commission (Gr. No. 72222, January 30, 1989, 169 SCRA 606).
The pertinent provision of the Labor Code of the Philippines insofar as probationary employees are concerned is Article 281 which provides:
“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.”
A probationary employee is not yet a regular employee and hence, does not enjoy security of tenure. During the period of probationary employment, he/she must be allowed to demonstrate his/her fitness and subsequently assessed and rated thereof. However, he/she can only be terminated either for cause or when he/she fails to qualify as a regular employee.
In that sense, it could be said that he/she enjoys limited security of tenure.
As explicitly enunciated by the Supreme Court in the case of Dusit Hotel Nikko vs Renato M. Gatbonton (G.R. No. 161654 May 5, 2006), the power to terminate a probationary employee based on his failure to qualify as a regular employee must be in accordance with the criteria laid down in the contract and that there must not be any shade of whims or caprice on the part of the employer. This was explained in the said case in this wise, to wit:
“As Article 281 clearly states, a probationary employee can be legally terminated either: (1) for a just cause; or (2) when the employee fails to qualify as a regular employee in accordance with the reasonable standards made known to him by the employer at the start of the employment. Nonetheless, the power of the employer to terminate an employee on probation is not without limitations. First, this power must be exercised in accordance with the specific requirements of the contract. Second, the dissatisfaction on the part of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and third, there must be no unlawful discrimination in the dismissal. In termination cases, the burden of proving just or valid cause for dismissing an employee rests on the employer.”
If the reasonable standards/specific requirements were not made known to you by the employer at the time of engagement or you feel that you met the required standards/requirements, however, you were terminated arbitrarily and was merely done to accommodate the capricious pleasure and satisfaction of your employer, you may file a Labor Complaint before the National Labor Relations Commission (NLRC) for illegal dismissal.
However, the chances of winning will depend on the evidence that will be presented before the said body and the appreciation of the same.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to

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