Are Probationary Employees Entitled to Benefits in the Philippines?
A comprehensive guide to rights, benefits, legal bases, and common exceptions
Executive summary
Yes—probationary employees in the Philippines are entitled to virtually all core labor standards and statutory benefits from Day 1, except for a few that require a minimum length of service (e.g., Service Incentive Leave requires one year). Employers may offer additional, non-statutory perks (like HMO or stock plans) and, unless required by law or contract, may validly condition those on regularization. What employers cannot do is deny statutory entitlements just because a worker is “probationary.”
Legal framework at a glance
Labor Code of the Philippines (as renumbered): Governs probationary employment, wages, hours of work, overtime, night shift differential, rest days, holiday pay, service incentive leave, termination standards, separation pay for authorized causes, and due process.
Presidential Decree (PD) No. 851: Mandates 13th-month pay for rank-and-file employees who have worked at least one month in a calendar year.
Republic Acts (selected):
- RA 11165 (Telecommuting Act) – parity of rights for teleworkers.
- RA 11210 (105-Day Expanded Maternity Leave Law) – applies regardless of employment status; with salary-differential rules and SSS benefits.
- RA 8187 (Paternity Leave) – 7 days with pay for married male employees (first four deliveries/miscarriages), regardless of status.
- RA 9710 (Magna Carta of Women) – includes special leave for gynecological surgery (subject to service requirements).
- RA 9262 (VAWC) – 10-day paid leave for qualified victims, not tied to employment status.
- RA 8972 as amended by RA 11861 (Expanded Solo Parents Welfare Act) – parental leave (requires one year of service) and other benefits.
- RA 8282/11199 (SSS) & RA 7875/11223 (PhilHealth UHC) & RA 9679 (Pag-IBIG) – mandatory coverage regardless of probationary status.
- RA 9178 (BMBE Law) – micro-business wage exemption (see “Special situations”).
- RA 10361 (Batas Kasambahay) – separate regime for domestic workers (included here only for contrast).
Key jurisprudence (illustrative):
- Abbott Laboratories (Phils.) v. Alcaraz – probationary employees enjoy due process and cannot be arbitrarily denied benefits granted by policy/contract; standards for regularization must be reasonable and made known at hiring.
- Line of cases on probationary standards – termination for failure to meet standards is valid only if those standards were communicated at the time of engagement and the employee was given a fair chance to meet them.
Bottom line: “Probationary” limits only the security of tenure (pending regularization) but not the enjoyment of statutory labor standards.
What is probationary employment?
Definition & purpose. A trial period (generally up to six (6) months from start of work) during which the employer may assess whether the employee meets reasonable, job-related standards that were made known at hiring.
Duration. Default maximum is 6 months, counted from actual start of work (tolling/extension is exceptional and must be legally justified). Sector-specific rules may vary (e.g., private basic/HEI school teachers often have longer probation consistent with education regulations).
Conversion to regular status. An employee becomes regular if:
- they are allowed to work after the probationary period; or
- they meet the standards within the period; or
- the employer failed to disclose standards at hiring.
Day-1 statutory entitlements (apply even while probationary)
These are non-waivable minimum labor standards. Probationary employees must receive them if they otherwise qualify under the statute’s general rules.
Minimum wage and wage orders.
- Regional wage boards set minimums. BMBEs (under RA 9178) are exempt from minimum wage—but not from other labor standards (see “Special situations”).
COLA/allowances embedded in wage orders.
- If a wage order requires cost-of-living allowances, these apply regardless of status.
Hours of work, overtime, premium pay, and night shift differential.
- Overtime (OT) premium for work in excess of 8 hours/day.
- Premium pay for work on rest days/special days as prescribed.
- Night Shift Differential for work performed between 10:00 p.m. and 6:00 a.m.
Regular holiday pay.
- Coverage includes probationary employees (subject to general eligibility rules for pay on unworked holidays).
- Special (non-working) day rules differ from regular holidays (usually “no work, no pay” unless company policy/CBA says otherwise; premium if worked).
13th-month pay (PD 851).
- Rank-and-file employees who worked at least one month in a calendar year are entitled to pro-rated 13th-month pay, even if probationary and even if later separated.
Statutory social insurance & government-mandated benefits.
- SSS, PhilHealth, Pag-IBIG: mandatory coverage from Day 1; employer must register, remit, and report.
- SSS Sickness & Maternity benefits depend on contribution posting and other program rules, not on regularization.
- Maternity leave (RA 11210): 105 days with pay (longer for solo parents; with salary-differential rules); employment status is irrelevant—what matters are program conditions.
- Paternity leave (RA 8187): 7 paid days for married male employees (first 4 deliveries/miscarriages), regardless of status.
Health and safety, anti-discrimination, data privacy, and other general protections.
- OSH Standards, Anti-Sexual Harassment/Safe Spaces, Anti-Age Discrimination, Anti-Violence Against Women and Their Children (10-day leave), and related statutes apply to all employees.
Benefits that depend on length of service (typical thresholds)
| Benefit/Leave | Typical Service Requirement | Notes (probationary impact) |
|---|---|---|
| Service Incentive Leave (SIL) | 1 year of service | 5 days with pay annually. Many probationary employees have not yet met the threshold; employers may grant SIL earlier by policy. |
| Solo Parent Leave (Expanded law) | 1 year | Separate from other solo-parent benefits/subsidies. |
| Women’s Special Leave (Magna Carta of Women) | ~6 months aggregate service in last 12 months (per implementing rules) | For gynecological surgery; separate from maternity. |
| Union/CBA-based leaves or allowances | As negotiated | Check CBA or company policy. |
| Loyalty/anniversary awards | 3–5 years+ | Customary; not statutory. |
If an employer voluntarily grants a benefit earlier than the law requires and does so consistently, the non-diminution rule may restrict later withdrawal or reduction.
Non-statutory benefits (company discretion)
HMO, dental/optical riders, life insurance, stock grants/ESPP, meal/transport allowances beyond wage orders, wellness perks, gadgets:
- Not mandated by law. Employers may condition them on regularization or other criteria—unless a contract, handbook, CBA, or long-standing practice makes them demandable.
Bonuses (other than the 13th-month pay):
- Purely gratuitous bonuses are discretionary; if a bonus is promised in a contract/handbook/CBA or established by consistent, deliberate practice, it may become a company policy that cannot be unilaterally withdrawn.
Due process and termination during probation
Permissible grounds.
- Just causes (serious misconduct, willful disobedience, etc.);
- Authorized causes (redundancy, retrenchment, closure, etc.);
- Failure to meet probationary standards (valid only if standards are reasonable, job-related, and disclosed at hiring).
Procedural due process.
- Just causes: “Twin-notice” rule + opportunity to be heard.
- Authorized causes: 30-day prior written notice to both the employee and DOLE + separation pay.
- Failure to meet standards: Written notice stating that the employee did not meet previously communicated standards, plus a fair opportunity to explain/contest (many employers mirror twin-notice for prudence).
Separation pay.
- Not due for just cause or for failure to meet standards.
- Due for authorized causes (with statutory formulas), even if the employee is still on probation; service less than a year is computed pro-rata.
Pay computation touchpoints (while probationary)
- Daily/Monthly rate application is the same as for regular employees (observe monthly factor rules and “no work, no pay,” subject to holiday/rest-day rules).
- OT / premium / NSD are computed from the employee’s basic rate, regardless of status.
- Deductions must be lawful (statutory contributions, taxes, authorized loans, or deductions with written consent and clear, lawful purpose).
Documentation and compliance checklist for employers
Offer/Contract expressly states:
- Probationary period length and start date;
- Clear, reasonable performance standards (attach KPIs/scorecards);
- Company benefits and whether they apply at Day 1 or upon regularization;
- Mandatory government coverages and contribution schedule.
Onboarding:
- SSS/PhilHealth/Pag-IBIG registration/updates; BIR 1902; payroll enrollment.
- Furnish Employee Handbook and obtain acknowledgment.
Performance management during probation:
- Written goals and coaching cadence; mid-probation review; documentation of feedback.
- Avoid moving goalposts; changes should be documented and reasonable.
Separation protocols (if any):
- Observe correct ground and procedure; prepare notices and computation sheets.
- Pay all accrued wages, 13th-month (pro-rated), cash conversion of unused earned leaves (if any), and separation pay where applicable; issue CoE within the statutory period.
Common mistakes—and how to avoid them
- Withholding 13th-month pay from probationary employees. Not allowed.
- Skipping SSS/PhilHealth/Pag-IBIG enrollment “until regularization.” Unlawful.
- Firing for “failure to meet standards” when no standards were disclosed at hiring. Invalid ground.
- Treating probation as a blanket exception to holiday pay, OT, or NSD. Incorrect.
- Unilateral withdrawal of long-granted benefits. Risk of non-diminution violation.
Special situations & sector notes
BMBE (RA 9178).
- Exempt from minimum wage, but all other labor standards (13th-month pay, government coverage, OT/NSD when applicable) still apply.
Education sector.
- Private school teachers commonly have a longer probation under education regulations/manuals; while on probation they still receive statutory benefits.
Project/fixed-term/seafarers.
- These categories may be non-probationary by nature (e.g., project-based employees). Where probation is used, statutory benefits still attach if the engagement is as an employee.
Domestic workers (Kasambahay).
- Covered by RA 10361 (a separate regime) with its own wage and benefit structure; “probationary” concepts are not used the same way.
Practical Q&A
Q: Can we start HMO only upon regularization? A: Yes, if HMO is not statutory and your policy/contract clearly says so. But you cannot delay SSS/PhilHealth/Pag-IBIG or any statutory leave/pay.
Q: Must a probationary employee get paid on a regular holiday when unworked? A: If they meet the general eligibility conditions for holiday pay under the Labor Code, yes—status is irrelevant.
Q: Does a probationary employee get SIL? A: Not until they complete one year of service (unless your policy/CBA grants it earlier).
Q: Are probationary employees covered by maternity or paternity leave? A: Yes. These laws apply regardless of status (subject to each law’s conditions, e.g., contributions, marital status, documentation).
Employer policy language (sample clauses)
Probationary period & standards. “Your employment is probationary for six (6) months starting [date]. The standards for regularization are attached as Annex A. You will be evaluated at 2nd, 4th, and 6th months.”
Statutory benefits. “From the start of employment, you are covered by SSS, PhilHealth, and Pag-IBIG; Labor Code standards on wages, hours, OT, premium and holiday pay; and 13th-month pay per PD 851.”
Non-statutory benefits. “Company-sponsored HMO and group life insurance commence upon regularization unless otherwise stated. The Company may enhance these benefits, but will not reduce any benefit made demandable by law, contract, or established practice.”
Key takeaways
- Probationary status does not strip statutory rights. Think “trial for fit,” not “no benefits.”
- Communicate standards at hiring—and document.
- Grant all Day-1 entitlements (wages, OT/premium/NSD, holiday pay, 13th-month, SSS/PhilHealth/Pag-IBIG).
- Apply service-threshold benefits correctly (SIL, solo-parent leave, women’s special leave).
- Mind special regimes (BMBEs, education, domestic work).
- When in doubt, err on the side of compliance—and put it in writing.
Disclaimer
This article provides general information on Philippine labor law for HR practitioners, managers, and employees. It is not legal advice. For a specific situation, consult counsel or DOLE.