Due Process and Valid Grounds in the Philippines

1) Why the “5th month” matters (and why it sometimes doesn’t)

In the Philippines, probationary employment is generally limited to six (6) months from the date the employee starts work, unless a longer period is allowed for specific categories (notably many teaching positions, which have their own rules under education regulations). If an employee is terminated on the 5th month, the termination happens within the probationary period, so the rules on probationary termination apply.

But “5th month” is not automatically “safe” for the employer or “unfair” for the employee. Legality turns on two pillars:

Valid ground for termination; and
Observance of due process (procedural fairness).

Even during probation, employers cannot terminate for arbitrary, discriminatory, or bad-faith reasons, and they must respect the employee’s constitutional and statutory rights.

2) The legal nature of probationary employment

A probationary employee is an employee on trial, but still an employee. This means:

The employee is entitled to labor standards (wages, benefits required by law, overtime rules, holiday pay if covered, etc.).
The employee is entitled to security of tenure, but in a probationary form: they can be terminated before regularization if specific requirements are met.
The employer has a legitimate interest in evaluating performance and fit, but must do so using standards known to the employee and applied fairly.

At the end of probation (commonly the 6th month), if the employee continues working without a valid extension allowed by law, they are generally treated as regular.

3) Two lawful bases to terminate a probationary employee

A probationary employee may be terminated for either of these:

A. Failure to qualify as a regular employee according to reasonable standards made known at engagement

This is the most probation-specific ground. It is lawful if:

The employer has reasonable, job-related standards (e.g., quality metrics, sales quotas if appropriate and attainable, attendance, behavioral standards tied to work, competency requirements, customer service metrics, productivity/accuracy standards).
These standards were communicated to the employee at the time of engagement (ideally written and acknowledged, but can be established by credible proof).
The employee was fairly evaluated against those standards.
The termination is truly for failure to meet those standards—not as a pretext.

Key point: The phrase “made known to the employee at the time of engagement” is crucial. If the employer cannot show the employee knew the yardstick from the start, termination for “failed probation” is vulnerable.

B. Any ground that would justify termination of a regular employee

A probationary employee can also be terminated for grounds under the Labor Code framework applicable to all employees, such as:

Just causes (employee fault or misconduct), and
Authorized causes (business reasons like redundancy, retrenchment, closure, disease, etc.).

Probation does not excuse wrongdoing nor immunize from legitimate business terminations. But employers must still comply with the correct substantive and procedural requirements for the ground invoked.

4) Valid grounds in detail

A. Failure to meet probationary standards (“failed probation”)

What makes standards “reasonable” and enforceable?

Standards are generally reasonable if they are:

Job-related and connected to actual duties;
Capable of objective or documented assessment (performance records, output reports, QA audits, attendance logs, scorecards, supervisor evaluations with examples);
Consistently applied (not selectively enforced);
Not impossible, discriminatory, or arbitrary.

Typical examples

Consistently missing measurable performance targets after coaching;
Persistent errors beyond acceptable thresholds;
Repeated attendance/tardiness issues tied to known policy (also overlaps with just cause if willful);
Behavioral deficiencies that materially affect work (e.g., repeated unprofessional conduct with documentation).

Common weaknesses in employer cases

No written standards or no proof they were explained upon hiring;
Vague standards (“must have good attitude” without behavioral definitions);
Moving the goalposts mid-probation;
Poor documentation (no memos, no coaching records, no evaluation forms);
Termination motivated by reasons unrelated to performance/standards (e.g., retaliation for complaints, discrimination).

Practical consequence: If the employer fails to prove standards were made known at engagement, a termination justified as “failed probation” can be struck down as illegal dismissal.

B. Just causes (employee-fault grounds)

Just causes generally involve culpable acts such as:

Serious misconduct (grave wrongful conduct connected to work);
Willful disobedience/insubordination of lawful and reasonable orders;
Gross and habitual neglect of duties;
Fraud or willful breach of trust (often relevant for positions of trust or handling money/property);
Commission of a crime or offense against the employer, employer’s family, or authorized representatives;
Analogous causes (causes similar in nature and gravity).

Proof expectations

Employers should have substantial evidence: incident reports, CCTV where available, witness statements, audit trails, emails/chats, written policies, inventory/accounting discrepancies, etc.

Proportionality

Even when misconduct is proven, termination should be proportionate to the offense, considering context, policies, and past records. Probationary status does not automatically justify harsher punishment.

C. Authorized causes (business/economic/health grounds)

These are not based on employee fault and include:

Redundancy (position is superfluous);
Retrenchment (to prevent losses);
Installation of labor-saving devices;
Closure or cessation of business;
Disease where continued employment is prohibited by law or prejudicial to health and certified by a competent public health authority (as commonly required in practice).

Special requirements

Authorized causes typically require:

Notice to the employee and to the Department of Labor and Employment (DOLE) within the legally prescribed period (commonly 30 days prior for many authorized causes), and
Payment of separation pay, except in some closure scenarios (e.g., closure due to serious losses may affect separation pay entitlement, depending on proof and circumstances).

For probationary employees, authorized causes can still apply, but the employer must meet the same substantive basis and procedural requirements.

5) Due process requirements (the “how” of termination)

Due process depends on the ground invoked.

A. Due process for “failed probation”

While probationary termination is distinct, procedural fairness remains essential. Commonly expected best practice includes:

Clear communication of standards at hiring (employment contract, job description, handbook, performance metrics, orientation acknowledgments);
Performance evaluation records (periodic reviews);
Notice of deficiencies and a reasonable opportunity to improve (coaching, performance improvement plan, mentoring), especially when deficiencies are correctable;
Written notice of termination stating that the employee failed to qualify under the communicated standards and summarizing the basis.

Because the decisive legal hinge is the “standards made known at engagement,” documentation of orientation and acceptance of standards is often determinative.

B. Due process for just causes (twin-notice rule + hearing opportunity)

For just causes, Philippine due process typically follows:

First written notice (Notice to Explain / Charge Sheet)
- Specifies the acts/omissions complained of and the rule/policy violated;
- Directs the employee to submit an explanation within a reasonable time.
Opportunity to be heard
- This may be an administrative conference or hearing where the employee can respond, present evidence, and explain.
Second written notice (Notice of Decision / Termination Notice)
- States the employer’s findings and the ground for termination;
- Confirms dismissal if warranted.

Probationary status does not remove the need for these steps when the termination is for employee fault.

C. Due process for authorized causes

This generally requires:

Written notice to the employee and notice to DOLE within the prescribed timeframe;
Observance of criteria (e.g., fair selection criteria in redundancy);
Payment of separation pay when required.

6) “End of contract” vs probationary termination: avoiding misclassification

Some employers label arrangements as “contractual,” “project-based,” or “fixed-term” to avoid probationary rules. In Philippine labor law, labels do not control; the real nature of employment does. If a worker is actually probationary or regular by the nature of work and circumstances, termination must comply with the applicable rules regardless of what documents call it.

If a probationary employee is terminated on the 5th month and the employer claims “contract ended,” scrutiny focuses on whether:

The work is truly project-based with a defined scope and duration known at hiring; or
The employee was effectively performing duties of a regular position under supervision and control, indicating an employer-employee relationship and corresponding security of tenure.

7) Documentation: what typically wins or loses cases

For employers (to show validity)

Employment contract explicitly stating probationary status and duration;
Written performance standards acknowledged at hiring (KPIs, competency framework, conduct standards);
Orientation records, handbook acknowledgment;
Performance evaluations with dates and concrete examples;
Coaching/PIP documents;
Incident reports and evidence for misconduct cases;
Twin notices and hearing minutes for just cause;
Authorized cause notices to employee and DOLE, plus separation pay computations where applicable.

For employees (to challenge validity)

Proof standards were never explained at hiring;
Evidence of satisfactory performance evaluations or praise inconsistent with “failed probation”;
Sudden termination without warning, evaluations, or opportunity to respond;
Inconsistent treatment vs similarly situated employees;
Evidence of retaliation (e.g., after a complaint), discrimination, or bad faith;
Lack of first/second notice in just cause;
Lack of DOLE notice and improper selection criteria in redundancy.

8) Typical scenarios on the 5th month and how they are analyzed

Scenario 1: Termination letter says “failed to meet expectations,” no prior standards given

High risk of illegal dismissal if the employer cannot prove standards were communicated at hiring and cannot show fair evaluation.

Scenario 2: KPI-based role (sales, collections, support metrics), KPIs are in contract and acknowledged; repeated shortfalls documented

Generally defensible, provided the KPIs are reasonable and consistently applied, and the termination notice ties the decision to those KPIs.

Scenario 3: Employee accused of theft/fraud during probation

Employer must proceed under just cause with twin notices and hearing opportunity. A simple termination memo without due process is vulnerable even if suspicion exists.

Scenario 4: Company abolishes role due to redundancy/reorg

Employer must treat it as an authorized cause (not “failed probation”), meet notice requirements (including DOLE notice), and pay separation pay when required.

9) Remedies and consequences if termination is illegal

When a termination is found illegal, consequences can include:

Reinstatement (or separation pay in lieu of reinstatement in some circumstances), and
Full backwages from dismissal until reinstatement/finality of decision, subject to the case’s circumstances and governing jurisprudence.

If the issue is primarily procedural (e.g., lack of proper notices in a just cause case) but there is a proven valid ground, outcomes can include liabilities related to procedural defects (often in the form of damages) depending on the framework applied by labor tribunals and courts.

10) Practical compliance blueprint (Philippine workplace realities)

Employer best practice checklist

Put probationary status, duration, and standards in writing at hiring.
Use measurable, role-relevant standards; avoid vague “attitude” grounds without defined behaviors.
Document coaching and evaluations (at least monthly for a 6-month probation).
If terminating for failed probation: issue a clear written notice citing the standards and documented deficiencies.
If terminating for misconduct: follow twin-notice procedure and provide a hearing opportunity.
If terminating for business reasons: comply with DOLE notice requirements and separation pay rules when applicable.
Apply standards consistently; avoid discriminatory or retaliatory timing.

Employee best practice checklist

Keep copies of contract, job description, handbook, KPI sheets, emails, evaluation forms.
Ask in writing for clarity on performance standards early if not provided.
Document coaching sessions, targets, and any conflicting instructions.
If given a notice to explain, respond clearly, factually, and on time; request a conference if needed.
If terminated abruptly, request in writing the basis and supporting evaluation records.

11) Special notes: extensions, interruptions, and regularization pitfalls

The standard probation ceiling is six months in most private-sector contexts.
Extending probation beyond what law allows, or keeping an employee working past the probation period without lawful basis, may result in regularization by operation of law.
Interruptions (e.g., absences) and their effect on counting probation can be contentious; employers should rely on clear policy language and fair administration, and employees should verify what the employer is treating as the probation end date.

12) Bottom line

Termination on the 5th month is lawful only if anchored on a valid ground and carried out with the proper process:

Failed probation requires reasonable standards made known at hiring and a termination genuinely based on documented failure to meet them.
Just causes require substantial evidence and the twin-notice + hearing opportunity process.
Authorized causes require compliance with statutory notice (including DOLE notice) and separation pay rules where applicable.

In all cases, probationary status does not permit arbitrary dismissal; it only defines the specific standards and timeframe by which an employee may be evaluated for regularization.