Probationary Employee Evaluation Period Under Philippine Labor Law
All You Need to Know

Probationary employment in the Philippines is a unique, time-bound arrangement that allows employers to evaluate whether a new hire meets the standards needed for regular employment. For the employee, it is a period to demonstrate suitability for the position. This article discusses the key legal principles, rights, obligations, and best practices surrounding probationary employment in the Philippine context.

1. Legal Basis

1.1. Labor Code of the Philippines

The primary source of law for probationary employment is the Labor Code of the Philippines. Relevant articles provide for the definition of employment statuses (regular, project, seasonal, casual, and probationary) and set forth the guidelines on how a probationary period operates.

1.2. Department of Labor and Employment (DOLE) Rules and Regulations

The Implementing Rules and Regulations (IRR) of the Labor Code, as well as various Department Orders and advisories issued by DOLE, provide additional clarity. These regulations specify how employers and employees should observe probationary rules, processes, and documentation.

1.3. Supreme Court Decisions (Jurisprudence)

Philippine jurisprudence has consistently upheld the principle that a probationary employee must be informed at the onset of employment of the standards or criteria upon which regularization will be based. Failure to do so may result in a probationary employee being deemed a regular employee from day one.

2. Definition of Probationary Employment

A probationary employee is hired on a trial basis for a specific period (usually up to six months) so that the employer can determine if the individual is fit to become a regular employee. The defining characteristics of a probationary arrangement are:

It must be for a fixed duration that does not ordinarily exceed six (6) months.
The employee must be informed of the performance standards or criteria for regularization at the time of engagement.
The employer must assess and evaluate whether the employee has satisfactorily met the established standards within that period.

3. Maximum Probationary Period

3.1. Six-Month Rule

The general rule is that probationary employment cannot exceed six (6) months from the date the employee started working. After six months, a probationary employee who continues to work is automatically deemed a regular employee by operation of law, unless (1) the probationary period has been legally extended under recognized exceptions, or (2) the employee’s role is covered by a different arrangement allowed by law.

3.2. Extensions

In certain specialized or technical positions, the probationary period may be extended if it is written into company policy or an employment agreement and is reasonable under the circumstances (e.g., roles requiring extensive training). In such cases, the extension must be:

Mutually agreed upon by the employer and the employee.
Communicated in writing with clear terms, duration, and the reasons for extension.
Within the bounds of reasonableness (excessive or unjustified extensions may be struck down by labor authorities).

3.3. Effect of Continued Employment Beyond the Probationary Period

If the employer allows the probationary employee to work beyond the end of the six-month period (or any validly extended period) without formally regularizing or dismissing them, the law deems the employee to be regular from that point onward.

4. Key Requirements for Employers

4.1. Communication of Standards

At the time of hiring, or at the start of the probationary period, the employer must explicitly inform the probationary employee of the performance standards or criteria upon which they will be evaluated.
These standards might include productivity targets, quality metrics, behavioral expectations, attendance rules, or other relevant measures.

Failure to comply with the requirement to communicate standards can result in the employee being considered a regular employee from day one, regardless of any subsequent evaluation.

4.2. Evaluation and Feedback

Employers should conduct periodic performance evaluations and provide constructive feedback. While the Labor Code does not require a specific number of evaluations, best practices suggest ongoing discussions to inform the employee if they are meeting, exceeding, or falling short of required standards.

4.3. Procedural Due Process for Termination

If an employer decides not to regularize a probationary employee for failure to meet standards, the dismissal must still comply with procedural due process, which typically includes:

A first notice specifying the grounds or reasons for possible dismissal (poor performance, misconduct, etc.).
An opportunity for the employee to explain or defend themselves (through a hearing or written explanation).
A second (final) notice explaining the decision to terminate.

Many employers mistakenly believe they can immediately dismiss a probationary employee without due process. While the standard for termination is less stringent compared to a regular employee, the law still requires adherence to fair notice and hearing before effecting dismissal.

5. Rights of Probationary Employees

Despite their temporary status, probationary employees are entitled to fundamental labor rights including, but not limited to:

Minimum wage and wage-related benefits (e.g., holiday pay, 13th month pay).
Statutory leaves (service incentive leave) once eligibility and conditions are met.
Safe working conditions and social protection (SSS, PhilHealth, Pag-IBIG).
Right to security of tenure during the probationary period in the sense that they cannot be dismissed without just cause or without following legal procedure.

Probationary employees do not enjoy the same level of security of tenure as regular employees; however, they cannot be terminated arbitrarily or without valid cause and proper procedure.

6. Grounds for Early Termination of Probation

An employer may dismiss a probationary employee before the expiration of the probationary period if:

The employee has violated company rules resulting in just or authorized cause for dismissal under the Labor Code.
The employee has clearly failed to meet the performance standards that were made known at the start of the probationary period, and the required due process was observed.

The mere fact of probationary status does not give an employer a free hand to terminate without a legitimate reason. Invalid or baseless dismissals of probationary employees can result in claims for illegal dismissal.

7. Consequences of Invalid Probationary Dismissal

If a probationary employee is terminated without valid cause and/or without the required due process, they may file a complaint for illegal dismissal. If found illegally dismissed, the employer may be ordered to:

Reinstate the employee (either as a regular or probationary employee, depending on the circumstances).
Pay back wages for the period they were out of work.
Possibly face additional damages if the dismissal was done in bad faith.

8. Best Practices for Employers

Provide clear, written standards at the start of the probationary employment.
Maintain open lines of communication and give the employee periodic, documented feedback.
Establish a fair and transparent evaluation system.
If performance is lacking, give notice and the chance to correct or improve within a reasonable time.
If terminating a probationary employee, comply strictly with procedural requirements (two-notice rule, opportunity to be heard).
Keep detailed records of performance appraisals, policy manuals, and communications, so that if a legal dispute arises, the employer can demonstrate compliance with legal standards.

9. Best Practices for Employees

Seek clarity on the criteria for regularization at the outset.
Fulfill performance and behavioral expectations proactively.
Maintain open communication with supervisors about targets and any challenges.
Document your progress—retain copies of performance reviews, memos, or any communications relevant to your probationary status.
If in doubt or if standards are unclear, politely request written guidelines from HR or management.

10. Conclusion

The probationary period under Philippine labor law is a mutual test for both employer and employee. On the employer’s side, it is a chance to determine whether an individual’s performance meets company standards. On the employee’s side, it is an opportunity to secure long-term employment by demonstrating competence and reliability.

Understanding and complying with the rules—from the clear communication of standards to the strict observance of due process—is crucial. By doing so, both parties can navigate the probationary stage fairly and effectively, setting the foundation for a productive and legally compliant working relationship.

Disclaimer: This article is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.