Dear Attorney,
I hope this message finds you in good spirits. I am an employee who has been working in my current organization for approximately two months. Recently, my employer expressed concerns about my performance, stating that I have been showing “low performance.” As I am still under probationary status, I am deeply worried about my job security and the implications of this assessment. I would like to seek your guidance on how to best protect my rights under Philippine law, especially if the company decides to prematurely terminate my employment. I am also eager to know the proper steps involved if they plan to impose any corrective measures. For now, I have not received any formal notice, but I sense that the situation might escalate soon.
Your assistance in clarifying the scope of an employer’s right to evaluate performance, the processes they must follow under the Labor Code of the Philippines, and any relevant jurisprudence or Department of Labor and Employment (DOLE) regulations would be highly appreciated. I am also interested in understanding whether there are specific standards on performance appraisal during the probationary period, and how employees can respond to a claim of low performance. Lastly, I would appreciate any insights regarding possible options if the company fails to provide due process or comply with the relevant labor laws.
Thank you very much for your time and expertise. I look forward to your legal advice and any recommendations you can provide.
Respectfully, Concerned Employee
A COMPREHENSIVE LEGAL ARTICLE ON PHILIPPINE LAW PERTAINING TO EMPLOYMENT PROBATION, PERFORMANCE EVALUATION, AND DUE PROCESS
Disclaimer: The discussion below is for informational purposes only and should not be construed as legal advice. While efforts have been made to make this article as accurate and up-to-date as possible, laws and regulations may change, and interpretations might differ depending on circumstances. Readers are encouraged to consult a qualified legal professional for personalized counsel.
I. Introduction
Employers in the Philippines have the prerogative to set standards of conduct and productivity, particularly with regard to newly hired personnel in their probationary period. However, this managerial prerogative is not absolute. It must be exercised within the confines of the Labor Code of the Philippines, administrative regulations issued by the Department of Labor and Employment (DOLE), and relevant Supreme Court decisions. This article will explore the nature of probationary employment, the standards for performance evaluation, and the procedural and substantive due process requirements that must be observed by employers. Additionally, it will address typical concerns that might arise if an employee is told they are showing “low performance” only a couple of months into their employment.
II. Defining Probationary Employment
Under Article 296 (formerly Article 281) of the Labor Code of the Philippines, an individual may be engaged on a probationary basis for a period not exceeding six (6) months from the date the employee started working. This probationary period is an opportunity for the employer to determine whether the probationary employee is qualified for regular employment based on reasonable standards that should be communicated to the employee at the time of engagement. If the employee successfully meets these standards, he or she becomes a regular employee at the end of the probationary period. Conversely, if the employer finds that the employee does not meet the standards, it may terminate the employee prior to or at the end of the probationary period, provided there is compliance with procedural due process and the termination is based on valid and reasonable grounds.
Purpose of the Probationary Period
The intent is twofold: (1) give the employer sufficient time to assess the employee’s work ethic, compliance with organizational standards, and skill level; and (2) give the probationary employee an opportunity to prove their suitability for the job. Notably, the probationary period is not meant to be a mechanism for arbitrary dismissal or exploitation, and so safeguards exist to protect workers.Communication of Standards
Under jurisprudence, it is crucial that the standards for retention of a probationary employee be made known at the time of hiring. If these standards are not communicated or are ambiguous, an employer may not be justified in terminating the employee for failing to meet them. This aligns with the principle that employees must be aware of the performance metrics used to judge them, allowing them to adjust their behavior and output accordingly.Shortened Probationary Period
Although the Labor Code prescribes a maximum of six months, an employer may, under certain circumstances, prescribe a shorter probationary period. However, once the employer chooses to do so, it must strictly adhere to those rules. If an organization decides on a three-month probationary period, for instance, any decisions regarding retention or termination should be made prior to or upon reaching the end of that three-month term, unless an extension is mutually agreed upon or allowed under company policy and existing regulations.
III. Performance Expectations and Management Prerogative
The “management prerogative” is a term frequently encountered in labor law, granting employers the right to regulate all aspects of employment, including hiring, work assignments, promotions, disciplinary measures, and dismissals. Courts typically respect this prerogative so long as it is exercised in good faith, consistent with relevant laws, and not oppressive or arbitrary.
Setting Performance Targets
Employers typically establish key performance indicators (KPIs), quotas, or other metrics to gauge an employee’s performance. These metrics must be reasonable, related to the nature of the work, and clearly conveyed to the employee from the outset. If an employer fails to inform a probationary employee of the specific metrics they will be judged upon, the employee could potentially raise a defense that the evaluation is invalid for lack of proper notice.Performance Evaluation Systems
Many companies implement formal performance evaluation systems. While such systems are primarily a managerial tool to assess competence, they also function as a safeguard for both employer and employee. For employees, a transparent and objective evaluation system helps them understand their strengths and weaknesses. For employers, it provides a documented basis for decisions on retention, promotion, and dismissal.Early Intervention and Documentation
If an employee is showing signs of underperformance, best practice dictates that the employer should issue verbal or written reminders, provide training or coaching, and give the probationary employee an opportunity to improve within a specified period. Documenting these measures is crucial, as it substantiates management’s claim that it followed due process and attempted to assist the employee.
IV. The Significance of Due Process in Philippine Labor Law
Under Philippine jurisprudence, the concept of due process in labor cases is both substantive and procedural.
Substantive Due Process
This refers to the validity of the grounds for termination. In the case of a probationary employee, a typical basis for termination would be failure to meet the prescribed performance standards. Hence, the employer must show that such standards exist, are reasonable, and that the employee failed to meet them.Procedural Due Process
Procedurally, employers are required to provide employees with a notice specifying the grounds for termination and a subsequent opportunity to explain or defend themselves. This is often referred to as the “two-notice rule.” Although the rules might be slightly more flexible for probationary employees, the fundamental requirement remains: the employee should be notified of any perceived deficiencies and be granted the chance to respond.- First Notice: Must clearly state the alleged act or omission (in the case of performance concerns, it must identify exactly how the employee has fallen short of the standard).
- Opportunity to Respond: The employee must be given sufficient time to prepare a response or justification.
- Second Notice: Must communicate the decision to dismiss the employee, specifying the reasons why the explanations were insufficient or unpersuasive, if that is the conclusion.
Documentation of Warnings and Performance Reviews
In cases involving performance issues, the employer’s documentation of frequent reminders, coaching sessions, and performance evaluations can serve as evidence of procedural due process. An employer’s failure to provide these pieces of evidence may indicate a breach of due process, giving rise to claims of illegal dismissal.
V. Grounds for Termination During the Probationary Period
While labor laws are inclined to preserve the security of tenure, especially once an employee becomes regular, the probationary status allows for termination on grounds not necessarily applicable to a regular employee—i.e., simply failing to meet performance benchmarks. But to ensure that such dismissals are not arbitrary, the employer must strictly adhere to the following:
Reasonable and Pre-communicated Standards
As noted, the standards for retention should have been clarified at the start of employment. If the standards were too vague, or if the employee had no notice of them, a dismissal on those grounds becomes questionable.Actual Non-Compliance
The employer should be able to demonstrate that the employee truly failed to meet said standards, ideally supported by performance records or documented evaluations.Proper Due Process
The employee must receive proper notices and be granted an opportunity to be heard. An employer may also consider providing a performance improvement plan (PIP) or other remedial programs before resorting to termination, as it not only fulfills good faith obligations but also mitigates potential labor claims.
VI. Possible Legal Remedies for Employees
If a probationary employee believes they have been unjustly terminated for alleged poor performance, or if they were never afforded the chance to rectify their shortcomings, various legal remedies exist:
Filing a Complaint at the DOLE or the National Labor Relations Commission (NLRC)
An aggrieved employee may file a complaint for illegal dismissal, underpayment of wages, or other labor standard violations. The NLRC is the quasi-judicial agency that handles such disputes.Pursuing Reinstatement and Backwages
If the dismissal is found to be illegal, a labor arbiter or the courts might order reinstatement (or payment of separation pay in lieu of reinstatement) and the payment of backwages.Award of Damages
In certain cases, moral and exemplary damages, as well as attorney’s fees, may be awarded if the employer is found to have acted in bad faith or with malice, although the threshold for proving bad faith is relatively high.
VII. Performance Evaluation Steps and Best Practices
To avoid disputes and confusion, here are recommended best practices for both employer and employee:
Initial Orientation
- The employer should conduct a thorough orientation regarding job responsibilities, the metrics used to measure success, company rules, and the length of probation.
- The employee should ask questions if any aspect is unclear, ensuring they understand the expectations fully.
Periodic Feedback Sessions
- Rather than waiting until the end of the probationary period, employers should schedule formal or informal check-ins to offer constructive feedback.
- Employees should use these sessions to request clarifications, ask for additional resources or training, and demonstrate a willingness to improve.
Documentation
- Employers are encouraged to keep clear records of all performance assessments, coaching sessions, training sessions, and any improvements or persistent issues noted.
- Employees, on their end, should maintain a personal record of achievements, received feedback, and steps taken to address any deficiencies.
Remedial Measures
- Employers who see potential in a probationary employee, despite initial subpar performance, might offer training, mentorship, or coaching.
- Employees who sense they are not meeting expectations should proactively seek help, whether from supervisors, colleagues, or external resources.
VIII. Addressing “Low Performance” Within Two Months of Employment
Given the concern that an employee is deemed “low performing” just two months into the job, several considerations apply:
Validity of Assessment Timing
A two-month period is relatively short, yet it may suffice to identify certain objective shortfalls. If the standards are clear—for instance, a daily or weekly quota—and the employee is consistently unable to meet those requirements, the employer might have grounds to raise a performance issue early on. On the other hand, if the role is complex or requires a longer learning curve, a two-month assessment might be premature.Sufficiency of Notice and Opportunity to Improve
Has the employer actually issued any notice, such as a written memo stating the deficiencies and giving the employee a chance to correct them? If not, the employee might argue that they have been deprived of due process. An employer’s abrupt statement that the employee is underperforming, without a formal warning or a chance to improve, could indicate potential labor violations.Comparison with Established Standards and Peers
To show genuine performance issues, an employer would typically compare the employee’s output to the standard or to similarly situated employees. Without documentation, a mere claim that “you are underperforming” may be insufficient. The employee has a right to ask for the actual criteria or metrics used.Potential Good Faith Efforts by the Employer
If the employer offered assistance, training, or extended deadlines in recognition of the employee’s need to adapt, this suggests good faith. On the other hand, if the employer merely criticized the employee without direction, that could be seen as lacking the transparency and fairness demanded by law.
IX. Consequences of Non-Compliance by the Employer
An employer who dismisses a probationary employee without following the guidelines set forth in the Labor Code and related regulations risks liability for illegal dismissal. Consequences can include:
Reinstatement of the Employee
In principle, if the dismissal is deemed illegal, the NLRC or courts can order the employee’s reinstatement, although the exact remedy can vary when dealing with probationary employment. In practice, relationships between the parties may have deteriorated to the point where reinstatement is unworkable.Payment of Unpaid Wages, Backwages, and Other Benefits
The labor tribunal may direct the employer to pay the employee for lost income during the period the case was litigated, subject to certain limitations if the employee is probationary.Damages and Attorney’s Fees
As noted, moral and exemplary damages are sometimes awarded if the employer acts in a manner deemed egregiously unfair, oppressive, or in bad faith, although such awards are not automatically granted.
X. Recommended Courses of Action for the Employee
If you are the employee who was notified of low performance at the two-month mark, here are some steps you may consider:
Request a Clarification or Documented Evaluation
Politely ask for a specific explanation of where your performance falls short. Ask for a copy of any evaluation forms or relevant metrics.Propose a Performance Improvement Plan
Indicate your willingness to improve. Suggest a short timeframe, such as 30 days, during which you can demonstrate progress. Request additional training or mentoring, if necessary.Keep Written Records
Store all memos, notices, and relevant communications. These could serve as vital evidence should the dispute escalate.Consult a Labor Law Specialist
If you anticipate potential termination or feel you are being treated unfairly, seek professional legal advice. An attorney can guide you on the best approach, whether it’s negotiating with management, filing a complaint, or exploring a settlement.Maintain Professionalism
Throughout the process, continue to uphold professional conduct. The manner in which you respond to feedback and adversity can influence how management views your sincerity and work ethic, and it may become part of the documented record.
XI. Key Jurisprudence and DOLE Issuances
Serrano vs. NLRC
While not specifically about probationary employment, this case highlights employees’ right to procedural due process.St. Luke’s Medical Center, Inc. vs. Torres
Demonstrates the necessity for employers to adequately communicate the grounds for dismissal and the importance of adequate notice.DOLE Department Order No. 147-15
Governs the rules on termination of employment and outlines general labor standards that can apply even to probationary employees, particularly concerning procedural due process requirements.Omnibus Rules Implementing the Labor Code
Provides further detail on implementing rules and regulations relevant to probationary employment, notices, and procedural aspects.
XII. Practical Insights and Conclusion
In conclusion, dealing with a performance-related issue within the first two months of probationary employment is a delicate situation that entails balancing the employer’s legitimate business interests against the employee’s rights to due process and fair treatment. While employers are well within their rights to require a certain level of output and to terminate probationary employees who do not meet prescribed standards, they must do so lawfully and with clear documentation.
For probationary employees who find themselves in this predicament, knowledge of your rights is critical. Being aware of the standards you must meet, requesting clarifications when needed, and maintaining a cooperative stance can significantly impact the outcome of any dispute. Where possible, open communication with your immediate supervisor or human resources department can help resolve many misunderstandings before they escalate into formal labor disputes.
Ultimately, the crux of the matter rests on whether the employer followed the proper legal processes and whether the grounds for alleged low performance were adequately communicated and proven. Should termination occur without adherence to these procedures, the employee may seek redress through the NLRC or the labor courts. Conversely, if the employer can clearly demonstrate that it has complied with procedural requirements and that performance expectations were fair and unmet, then the dismissal could withstand legal scrutiny.
Through careful adherence to guidelines, transparent performance metrics, and open communication, both employers and employees can navigate the probationary phase with a focus on fairness and accountability, hopefully leading to a productive, mutually beneficial employment relationship or an amicable, lawful parting of ways.
This concludes a comprehensive examination of probationary employment, performance evaluations, due process in termination, and the rights and responsibilities of both employers and employees under Philippine law.