Introduction

In Philippine labor law, probationary employment is a narrow exception to security of tenure. When an employee moves from one entity to another within a corporate group—via secondment, intra-group transfer, absorption, spin-off, or merger—the central question is: Does the probationary period reset, continue, or disappear altogether? The answer depends on who the employer-of-record is, whether there is continuity of service, and whether the transfer is used to circumvent regularization.

This article explains all major scenarios, the six-month rule and its exceptions, the “standards at engagement” doctrine, due process, successorship, secondment mechanics, constructive dismissal risks, and practical drafting.

The Probationary Basics

The six-month ceiling (general rule)

Probationary employment generally may not exceed six (6) months from date of engagement.
The employer must communicate reasonable standards for regularization at the time of engagement; otherwise, the employee is deemed regular.
Termination for failure to meet probationary standards still requires due process (notice of grounds anchored on the communicated standards and an opportunity to be heard).

Recognized exceptions/variants

Industry-specific rules can set a longer probation (e.g., private school teachers typically have longer probation under education regulations).
Apprenticeship/learnership programs may follow their own approved periods and standards.
Project/seasonal/fixed-term arrangements are different creatures; they do not excuse non-compliance with probation rules if the worker was in fact engaged on a probationary basis.

Mapping the Transfer: Who Is the Employer-of-Record?

1) Secondment/assignment to an affiliate (same employer-of-record)

You remain employed by Company A and are merely assigned to Company B (affiliate).
Probation status: If you were already probationary, the clock continues to run; it does not reset because the employer has not changed.
If you were already regular in Company A, you remain regular despite working day-to-day at Company B (unless a lawful novation occurs—see below).
Payroll and disciplinary authority should remain with Company A, with a secondment agreement clarifying evaluation standards and supervision.

2) Transfer with absorption (change of employer without break in service)

You move from Company A to Company B, and both agree (and document) that your service is continuous and tenure is recognized.
Probation status:
- If you were still probationary and within six months, the remaining balance carries over (no reset).
- If you were regular, you cannot be placed back on probation by virtue of the transfer alone.
This is common in intra-group realignments, spin-offs, or shared services integrations.

3) Resignation and rehire by the affiliate (novation with break in service)

You resign from A and sign a new contract with B as a new hire.
Probation status: On paper, B may impose a new probationary period if all legal requirements are met (standards at engagement, maximum period, etc.).
Caveat: If the “rehire” structure is used to evade regularization (e.g., repeated resets within a group for substantially the same work), it risks being struck down as a sham/anti-tenure scheme, with continuous service recognized across entities under the control/economic-realities and single-enterprise/alter-ego analyses.

4) Mergers, consolidations, and business transfers (successor employer)

When B becomes the successor to A (by law or transaction) and absorbs employees, length of service and tenure carry over.
Probation status: A successor cannot re-probationize absorbed workers solely because ownership changed.
If a new probation is attempted, it must be supported by a bona fide new role with distinct qualifications and freshly communicated standards; otherwise, it will likely be void.

Key Doctrines That Decide Outcomes

A) Standards-at-Engagement Rule

Probationary dismissal is valid only on failure to meet reasonable standards made known at hiring. When work continues in an affiliate without a fresh, lawful engagement, the original standards (or already acquired regular status) control. A midstream “reset” without a genuine new engagement is vulnerable.

B) Continuity of Service vs. Break in Service

Courts will look past labels (e.g., “rehire”) to see if there is uninterrupted work, same job, same supervisors/tools/premises, or seamless payroll/benefit continuity. If yes, the service is continuous and probation does not reset (or may be deemed completed/regular).

C) Anti-circumvention / Single-Enterprise

Where affiliates operate as alter egos—common ownership, control, management, business purpose, location—group-wide continuity can be recognized. Rotating a worker among affiliates to keep them probationary amounts to subterfuge and can result in a finding of regular employment and illegal dismissal if terminated.

D) Successorship in Employment

In mergers or asset transfers where the business is substantially the same, the successor employer inherits obligations to employees. Tenure is preserved, including the status of regulars and the remaining probation period (if any).

E) Non-diminution & Security of Tenure

Transfers cannot cause a diminution of benefits or be used to strip tenure already earned. A forced transfer that materially degrades terms or imposes an unwarranted probation reset can amount to constructive dismissal.

Can an Affiliate Impose a New Probation? (Decision Matrix)

Situation	Employer-of-record changes?	Same role/qualifications?	Documented break in service?	Probation reset allowed?
Secondment (A ➜ B)	No	Often yes	No	No (clock continues or regular status remains)
Absorption with continuity	Yes	Usually same	No	No (carry over status or remaining balance)
Resign & rehire (bona fide)	Yes	Different role/standards	Yes	Possibly (if lawful and not evasive)
Merger/successor	Yes	Same business	No	No (tenure preserved)
Spin-off to new entity, same job	Yes	Yes	No	No (continuity favored; resets suspect)

Mid-Probation Transfers: How to Handle

Document the remaining probation clock. If day 90 of 180 at A, a secondment to B should state that 90 days remain, with the same standards (or harmonized standards if role changes slightly).
No silent resets. Any attempt to restart must show a genuine new engagement and new standards disclosed at the new hiring—and must not exceed a reasonable probation window.
Evaluate fairly. Host affiliate managers can evaluate, but decisions must flow through the employer-of-record with due process.

Changing Roles on Transfer

If the transfer involves a substantially different role with new competencies, the affiliate may offer a new engagement with a lawful probation period from the new start date, provided standards are clearly set at engagement.
If the “new” role is only nominal while the work is essentially the same, a reset is vulnerable.

Due Process & Termination During/After Transfer

Probationary termination requires:
1. Written notice specifying the failure to meet known standards, and
2. Opportunity to explain (hearing or written explanation).
Post-probation (regular) termination requires a just/authorized cause and the two-notice rule (notice to explain + notice of decision) and, for authorized causes, separation pay and DOLE reporting.
If an employee is terminated because they refused an improper transfer or objected to an unlawful reset, this may be constructive dismissal.

Government-Mandated Contributions & Benefits (Continuity Effects)

SSS, PhilHealth, Pag-IBIG: A change of employer does not erase credited years of service; but a break in service may affect company-based benefits.
13th month, SIL/VL: If the transfer is structured as continuous service, these benefits should carry over and be pro-rated accordingly.
Non-diminution: If the transfer lowers established benefits without lawful basis or consent, it may violate the non-diminution rule.

Red Flags That Suggest an Invalid Probation Reset

Serial transfers across sister companies with short stints always on probation for the same work.
Lack of written standards at purported “new” engagement.
Seamless continuity of duties, workstation, supervisors, and KPIs despite a claimed “new” employer.
Threats of termination unless the employee signs a fresh probation despite being already regular.
Company admissions that the reset is to “test longer” beyond the lawful period.

Sample Clauses (For Compliance)

Secondment Clause (no reset)

“Employee remains employed by Company A as employer-of-record. The temporary assignment to Company B does not alter employment status. If Employee is probationary, the remaining probationary period is ___ days, subject to the standards communicated at engagement on [date]. Evaluation input from Company B will be furnished to Company A.”

Absorption with Continuity

“Effective [date], Company B absorbs Employee from Company A with recognition of continuous service from [original hire date]. Employee’s regular status / remaining probation of ___ days is acknowledged. No diminution of established benefits shall occur by reason of this transfer.”

Bona Fide New Engagement (reset only where lawful)

“Employee is engaged by Company B as [new role], distinct from Employee’s prior position with Company A. Standards for regularization are attached and acknowledged. Probationary period: [length consistent with law], commencing [start date].”

Frequently Asked Questions

1) I was already regular in Company A. Can Company B put me back on probation after an intra-group transfer? No, not for the same or substantially similar work in a continuity setup. A reset risks constructive dismissal or an illegal probation scheme.

2) My transfer is called “secondment.” Who can fire me? Your employer-of-record (Company A). The host may recommend discipline, but Company A must observe due process and the standards applicable to you.

3) I signed a “resign and rehire” to join the affiliate. Is a new probation valid? It can be—only if this is a bona fide new engagement with newly disclosed standards and not a device to avoid regularization for essentially the same job.

4) The group merged entities and I was absorbed. Can they restart probation? Generally no. Successor employers inherit tenure; probation cannot be restarted solely due to corporate restructuring.

5) I was mid-probation when transferred. Do my days count? Yes. The remaining balance should carry over unless you truly entered a new engagement with lawful new standards for a different role.

Practical Playbook for HR & Counsel

Decide the model: secondment vs. absorption vs. bona fide re-engagement.
Fix the paperwork: assignment memo or tri-partite agreement; explicit employer-of-record; probation balance or regular status; standards attached.
Avoid resets: only allow a probation reset for a genuine new role with fresh standards, within lawful periods.
Communicate standards at engagement (and re-engagement if truly new).
Preserve continuity where intended: recognize start date, carry over benefits and KPI history.
Audit for anti-circumvention risk: watch for serial probation across affiliates.
Due process discipline map: who issues notices, who hears, who decides.
Document consent: transfers materially changing terms require employee consent; otherwise, risk constructive dismissal.

Key Takeaways

Label doesn’t control—the employer-of-record and continuity of service do.
Secondment: probation continues; no reset.
Absorption with continuity: tenure carries over; no reset.
Resign & rehire: a new probation is lawful only for a genuine new engagement with standards disclosed at hiring, not to evade regularization.
Mergers/successorship: tenure preserved; no re-probation.
Any reset must respect the six-month rule (unless a valid industry-specific exception applies) and the standards-at-engagement requirement.
Improper resets, forced transfers, or tenure-eroding moves can amount to constructive dismissal and illegal termination.

If you’d like, I can turn this into: (1) a transfer/secondment toolkit (model memos and checklists), (2) a probation standards sheet template, and (3) a risk matrix to test proposed transfers for anti-circumvention.