Introduction

In the Philippine labor landscape, probationary employment serves as a critical phase where employers assess an employee's suitability for regular status. Governed primarily by the Labor Code of the Philippines (Presidential Decree No. 442, as amended), this period allows employers to evaluate performance against predefined standards. One such standard that may lead to termination is the lack of initiative, a subjective yet legally recognized criterion when properly established. This article explores the legal framework, grounds, procedural requirements, jurisprudential insights, and implications of terminating probationary employees on this basis, providing a comprehensive overview within the Philippine context.

Legal Framework for Probationary Employment

Probationary employment is defined under Article 296 of the Labor Code, which states that it shall not exceed six (6) months from the date the employee starts working, unless otherwise provided by apprenticeship agreements or when the nature of the work requires a longer period. The purpose is to afford the employer an opportunity to observe the employee's fitness, including skills, attitude, and overall performance, while the employee learns the job.

During this period, the employee is not yet entitled to the full security of tenure afforded to regular employees under Article 294 of the Labor Code. However, probationary employees are protected from arbitrary dismissal. Termination must be based on the failure to meet reasonable standards communicated to the employee at the time of hiring. These standards must be clear, objective where possible, and relevant to the job requirements.

The Department of Labor and Employment (DOLE) further regulates this through Department Order No. 147-15, which outlines rules on employment termination, emphasizing due process and just or authorized causes.

Grounds for Termination: Focus on Lacking Initiative

General Grounds for Terminating Probationary Employees

Probationary employees may be terminated for:

Just Causes under Article 297 (e.g., serious misconduct, willful disobedience, gross negligence, fraud, or commission of a crime).
Authorized Causes under Article 298 (e.g., installation of labor-saving devices, redundancy, retrenchment, or closure).
Failure to Qualify as a Regular Employee, which is the most common ground during probation and does not require the same level of due process as regular employees.

Lacking initiative falls under the third category—failure to qualify—provided it aligns with the employer's reasonable standards.

Specific Ground: Lacking Initiative

Initiative refers to the employee's proactive approach, self-motivation, and ability to perform tasks without constant supervision. In roles requiring creativity, problem-solving, or independent decision-making (e.g., sales, management, or technical positions), demonstrating initiative is often essential.

For lacking initiative to be a valid termination ground:

Standards Must Be Made Known: At the onset of employment, the employer must explicitly inform the employee of expectations regarding initiative. This could be through a job description, performance metrics, or an employment contract clause. For instance, a sales probationer might be expected to generate leads independently or propose process improvements.
Reasonableness of Standards: The criteria must be fair and job-related. Courts have ruled that vague or unattainable standards violate the employee's rights. Initiative should be measurable, such as through key performance indicators (KPIs) like completing tasks ahead of schedule or suggesting innovations.
Evidence of Deficiency: The employer must substantiate the lack of initiative with concrete examples, such as failure to volunteer for additional responsibilities, repeated need for prompting, or missed opportunities to contribute ideas. Mere subjective dissatisfaction is insufficient.

If initiative is not part of the communicated standards, termination on this ground could be deemed illegal, potentially leading to claims of unlawful dismissal.

Procedural Requirements for Termination

Even for probationary employees, due process is mandated under the Twin-Notice Rule, as clarified by DOLE regulations and Supreme Court decisions:

First Notice: A written notice specifying the grounds for termination (e.g., lack of initiative) and detailing the employee's shortcomings, with an opportunity to explain.
Hearing or Conference: While not always formal, the employee must be given a chance to defend themselves.
Second Notice: A written decision indicating the employer's final action, based on the employee's response and evidence.

Failure to observe due process, even if the ground is valid, can result in liability for nominal damages or reinstatement.

Additionally, the termination must occur before the end of the probationary period. If the employee completes six months without notice of non-qualification, they automatically become regular.

Jurisprudential Insights

Philippine jurisprudence provides guidance on this topic through Supreme Court rulings:

Mitsubishi Motors Philippines Corporation v. Chrysler Philippines Labor Union (G.R. No. 148738, June 29, 2004): The Court emphasized that probationary termination must be based on standards known to the employee. In cases involving attitude-based deficiencies like initiative, evidence must show consistent underperformance.
Abbott Laboratories v. Alcaraz (G.R. No. 192571, July 23, 2013): This case highlighted that employers have wide latitude in setting standards, including soft skills like initiative, but must prove the employee's failure through performance evaluations. The Court ruled that vague allegations of "lack of drive" without specifics are invalid.
International Catholic Migration Commission v. NLRC (G.R. No. 72222, January 30, 1989): Affirmed that initiative can be a qualifying factor if tied to job duties, such as in administrative roles requiring self-starter qualities.

In practice, labor arbiters and the National Labor Relations Commission (NLRC) scrutinize such terminations to prevent abuse, often requiring documentation like performance appraisals or incident reports.

Employee Rights and Remedies

Probationary employees terminated for lacking initiative retain rights under the law:

Backwages and Benefits: If dismissal is found illegal, the employee may be entitled to reinstatement with full backwages from termination until actual reinstatement.
Damages: Moral and exemplary damages if bad faith is proven.
Filing Complaints: Employees can file illegal dismissal cases with the DOLE or NLRC within the prescriptive period (generally four years for money claims).

Employers risk penalties, including fines from DOLE for non-compliance with labor standards.

Employer Best Practices

To mitigate risks:

Document everything: Use probationary contracts with clear KPIs on initiative.
Conduct regular feedback sessions.
Train supervisors on objective evaluation.
Ensure standards are non-discriminatory and compliant with equal opportunity laws.

Challenges and Considerations

Subjectivity in assessing initiative poses challenges. What constitutes "lacking" can vary, leading to disputes. Cultural factors in the Philippines, such as hierarchical work environments, may influence perceptions—employees from more directive cultures might appear less initiative-driven.

In unionized settings, collective bargaining agreements (CBAs) may impose additional requirements.

During economic downturns or post-pandemic recovery, courts may be more lenient toward employees, emphasizing compassion in labor decisions.

Conclusion

Terminating probationary employees for lacking initiative in the Philippines is permissible under the Labor Code, provided it stems from failure to meet pre-disclosed, reasonable standards. This ground underscores the probationary period's evaluative nature but demands rigorous adherence to due process and evidence-based decision-making. Employers must balance managerial prerogative with employee protections to avoid litigation, while employees should seek clarity on expectations from day one. Understanding these nuances ensures fair labor practices, fostering a productive workforce aligned with Philippine legal principles.