Sample Probationary and Regularization Employment Contract for Company Canteens in the Philippines

I. Legal Framework Governing Probationary Employment and Regularization

In the Philippines, employment relationships in company canteens are governed primarily by the Labor Code (Presidential Decree No. 442, as amended), Department of Labor and Employment (DOLE) issuances, and Supreme Court jurisprudence.

Article 295 (formerly Article 281) of the Labor Code expressly allows probationary employment:

“Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. An employee who is allowed to work after a probationary period shall be considered a regular employee.”

Key principles established by consistent Supreme Court rulings (Escario v. NLRC, G.R. No. 160302, 2010; Aliling v. Feliciano, G.R. No. 185829, 2012; Abbott Laboratories v. Alcaraz, G.R. No. 192571, 2013):

1. Probationary employment is valid only if the employer communicates reasonable standards/criteria for regularization at the time of engagement.
2. The standards must be made known to the employee at the start of employment.
3. Failure to communicate the standards renders the employee regular from day one.
4. Even if standards are communicated, if the employee is allowed to work beyond six (6) months without termination, he/she automatically becomes regular.
5. Probationary status cannot be used to circumvent security of tenure.

For company canteen workers (cooks, kitchen helpers, cashiers, servers, utility/dishwashers), the nature of work is usually necessary and desirable to the principal business (employee welfare and productivity), hence regularization after six months is the rule, not the exception.

II. Special Considerations for Company Canteen Employees

1. Food safety and sanitation requirements under Republic Act No. 10611 (Food Safety Act of 2013) and DOH Administrative Order No. 2014-0033 require Health Certificates/Food Handler’s Certificates.
2. Mandatory pre-employment and periodic medical examinations (Hepatitis A screening, stool examination, chest X-ray).
3. Uniforms, personal protective equipment (hair nets, aprons, gloves), and hygiene standards must be provided by the employer without cost to employees (Article 110, Labor Code – non-diminution of benefits).
4. Meal periods and free meals are customary and often considered part of compensation package.
5. Overtime work is common during company events; night shift differential applies if work is between 10:00 p.m. and 6:00 a.m.
6. Canteen employees are covered by the general minimum wage for the region; they are not domestic workers.

III. Mandatory Clauses in a Valid Probationary Contract

To withstand DOLE and NLRC scrutiny, the probationary contract must contain:

1. Express statement that employment is probationary and shall not exceed six (6) months.
2. Clear, reasonable, and specific performance standards/criteria for regularization (quantitative and qualitative).
3. Date of effectivity and exact termination date of probationary period.
4. Acknowledgment by the employee that the standards were explained and understood.
5. Provision on termination during probation (only for failure to meet standards, not for just/authorized causes which require due process even for probationary employees).

IV. Sample Probationary Employment Contract (Highly Recommended Template for Company Canteens – 2025 Version)

PROBATIONARY EMPLOYMENT CONTRACT

KNOW ALL MEN BY THESE PRESENTS:

This Probationary Employment Contract is entered into this ___ day of _______________, 2025, in ____________________, Philippines, by and between:

[COMPANY NAME], a corporation duly organized and existing under Philippine laws, with principal office at _______________________________, represented by its HR Manager, ________________________, hereinafter referred to as the “EMPLOYER”;

-and-

_______________________________, Filipino, of legal age, single/married, and resident of ____________________________________, hereinafter referred to as the “EMPLOYEE”.

WITNESSETH THAT:

1. POSITION AND WORKPLACE
   The EMPLOYER hereby employs the EMPLOYEE as ________________ (Canteen Cook / Kitchen Helper / Cashier / Server / Dishwasher) assigned at the company canteen located at _______________________________.

2. PROBATIONARY STATUS AND DURATION
   The EMPLOYEE is hired on probationary status for a period of SIX (6) MONTHS commencing on ________________ (start date) and ending on ________________ (exact date 6 months later). The EMPLOYEE understands that regularization is not automatic and depends on meeting the performance standards below.

3. PERFORMANCE STANDARDS FOR REGULARIZATION
   The EMPLOYEE shall be evaluated based on the following reasonable standards, which were explained and discussed with the EMPLOYEE prior to signing this contract:

a) Quality of Work – Consistently prepares/serves food in accordance with company recipes, portion sizes, and presentation standards with no more than two (2) valid customer complaints per month.
b) Hygiene and Sanitation – 100% compliance with food safety protocols, proper use of PPE, and perfect score in monthly sanitation audits.
c) Attendance and Punctuality – No unexcused absences and no more than three (3) tardiness incidents in six months.
d) Customer Service (for front-line positions) – Average customer satisfaction rating of at least 4.5/5.0 in monthly feedback forms.
e) Teamwork and Attitude – Positive performance appraisal rating of at least “Meets Expectations” in supervisory evaluations.

The EMPLOYEE acknowledges receipt of the Canteen Operations Manual and Food Safety Guidelines.

4. COMPENSATION AND BENEFITS DURING PROBATION
   The EMPLOYEE shall receive a daily wage of Php _______ (not lower than regional minimum wage), payable every 15th and end of month. During probation, the EMPLOYEE shall be entitled to:
   • Mandatory benefits (SSS, PhilHealth, Pag-IBIG)
   • 13th-month pay (pro-rated)
   • Service Incentive Leave (5 days with pay after 12 months; pro-rated upon regularization)
   • Free daily meals during shift
   • Uniforms and PPE at company expense
   • Overtime pay, holiday pay, night shift differential as applicable

5. TERMINATION DURING PROBATION
   The EMPLOYER may terminate this contract prior to the end of the probationary period only if the EMPLOYEE fails to meet the above standards, upon written notice and opportunity to improve (except in cases of serious misconduct).

6. AUTOMATIC REGULARIZATION
   If the EMPLOYEE is allowed to continue working beyond ________________ (end date), he/she shall automatically become a regular employee entitled to full security of tenure and all benefits under the Company’s regular employment policy.

IN WITNESS WHEREOF, the parties have hereunto set their hands on the date and place first above written.

---

EMPLOYEE EMPLOYER
Signed in the presence of: _______________________________

V. Notice of Regularization (Must Be Issued in Writing)

[Company Letterhead]
Date: ________________

NOTICE OF SUCCESSFUL COMPLETION OF PROBATIONARY PERIOD AND REGULARIZATION

Dear Mr./Ms. _______________________________,

We are pleased to inform you that you have successfully met the performance standards required for regularization.

Effective ________________ (date after 6 months), your employment status is hereby converted to REGULAR with the following updated terms:

1. Position remains ________________________
2. Basic monthly salary: Php ______________
3. Entitled to all regular employee benefits including:
   • Vacation Leave (15 days/year)
   • Sick Leave (15 days/year)
   • Emergency Leave
   • Birthday Leave
   • Annual Physical Examination
   • HMO coverage (after 6 months as regular)
   • Retirement benefit under company plan
   • Other benefits under existing CBA (if unionized)

Congratulations and welcome to the regular workforce!

Sincerely,

---

HR Manager

VI. Sample Regular Employment Contract Clause (for Execution upon Regularization)

Upon regularization, it is best practice to execute a new Regular Employment Contract or an Amendment/Confirmation of Regularization containing:

• Permanent status
• Updated salary and benefits
• Reference to Company Handbook/CBA
• Non-diminution clause
• Continuing obligation to maintain Health Certificate

VII. Best Practices and Common Violations to Avoid

1. Never use successive probationary contracts – illegal (project employment rules apply only if truly project-based).
2. Always document performance evaluations monthly during probation.
3. Issue written warnings if performance is deficient.
4. Do not deduct cost of uniforms, PPE, or meals from salary.
5. Health certificates must be renewed every six months or as required by LGU.
6. Pregnant canteen workers cannot be placed on probationary status if already regular (RA 11210 – 105-day Expanded Maternity Leave applies).

Compliance with the above templates and principles has consistently been upheld by the Supreme Court as sufficient to establish valid probationary employment while protecting the constitutional right to security of tenure. Employers operating company canteens are strongly advised to adopt these exact or substantially similar contracts to minimize labor disputes.