Termination of Probationary Employees and the “One-Month Notice” Rule under Philippine Labor Law
1. What “Probationary Employment” Legally Means
- Statutory basis. Article 296 of the Labor Code (previously Art. 281) allows employers to hire a worker on probation for up to six (6) months, unless a longer period is fixed by a registered apprenticeship agreement.
- Standards up-front. The employer must make known the reasonable performance standards at, or before, the worker’s engagement. If the standards are not communicated, the employee is deemed a regular employee from Day 1 (Abbott Laboratories v. Alcaraz, G.R. No. 192571, 23 July 2013).
- Conversion to regular status. If the employee is retained after six months, or if the employer fails to evaluate properly, the employment becomes regular by operation of law.
2. Grounds for Ending Probationary Employment
| Ground | Governing Article | Notice & Hearing Needed | Separation Pay |
|---|---|---|---|
| Failure to meet reasonable standards | Art. 296 | Single written notice (see §4-B) | None |
| Just causes (serious misconduct, fraud, etc.) | Art. 299 (formerly 282) | Twin-notice + hearing (see §4-A) | None |
| Authorized causes (redundancy, retrenchment, closure, installation of labor-saving devices) | Art. 298 (formerly 283) | 30-day prior notice to both employee and DOLE (the “one-month notice”) | Yes—amount depends on cause |
| Disease | Art. 299 [j] | 30-day notice + DOH clearance | Separation pay equivalent to one-month salary |
Key takeaway: The famous **“one-month notice rule” belongs to Article 298 authorized-cause terminations, not to the ordinary case of failing to qualify during probation. Misapplying it is a common but costly mistake.
3. The DOLE’s Procedural Playbook
Department Order No. 147-15 (Series of 2015) codifies how due process must unfold.
A. If the ground is a just cause
- Notice to Explain – Specify the charge(s), give the employee at least five (5) calendar days to submit a written explanation.
- Hearing or conference – Give a real chance to be heard and to present evidence.
- Notice of Decision – State the findings, the law/jurisprudence relied on, and the effectivity date of dismissal.
B. If the ground is failure to meet standards
Only a single written notice is required—served within a reasonable time before or at the moment of termination—stating:
- (a) the fact of non-qualification,
- (b) the specific standard(s) unmet, and
- (c) the date when employment ends. A hearing is optional but recommended if facts are disputed (Aliling v. Feliciano, G.R. No. 185829, 25 Apr 2012).
C. If the ground is an authorized cause
30-day advance notice to:
- the employee and
- the Regional Office of DOLE (via the official Establishment Termination Report).
Attach board resolution or proof of restructuring, financial statements, etc.
Pay the legally mandated separation pay on or before the last working day.
4. Separation-Pay Cheat Sheet
| Cause of Termination | Separation-Pay Formula |
|---|---|
| Redundancy / installation of labor-saving devices | 1 month pay per year of service (½ month fraction ≥ 6 months = 1 yr) |
| Retrenchment / closure not due to serious losses | ½ month pay per year of service |
| Disease | ½ month pay per year, but not less than one (1) month pay |
| Failure to qualify / just causes | None (only unpaid wages + proportional 13th-month) |
Probationary employees are not exempt from separation pay if the dismissal is for an authorized cause; conversely, they get none when the dismissal is simply for non-qualification.
5. Sample Timelines
| Scenario | Day 0 | Day 10 | Day 30 |
|---|---|---|---|
| Poor performance | Written notice citing unmet KPIs; effectivity immediate or any reasonable future date | (Optional) hearing | – |
| Redundancy | 30-day notice filed with DOLE + served on employee | – | Last day of work; release separation pay |
6. Common Compliance Pitfalls
- One-size-fits-all 30-day notice – Using Article 298 notice for ordinary probationary failures leads to illegal-dismissal findings.
- Unstated standards – If you cannot produce proof that standards were explained on hiring (contract provision, onboarding checklist, email), dismissal fails.
- “Endo” rotations – Repeatedly rehiring workers on six-month contracts exposes the company to regularization claims and serious penalties under RA 10395.
- No DOLE report – For authorized-cause dismissals, skipping the Establishment Termination Report is a fatal procedural defect.
7. Employer Best-Practice Checklist
| Before Hiring | During Probation | When Considering Termination |
|---|---|---|
| Draft detailed job description and KPIs. | Give written performance feedback at midpoint. | Identify the legal ground (just, authorized, or non-qualification). |
| Incorporate probationary clause and standards in the contract; have employee sign. | Secure signed coaching logs and evaluations. | Follow the correct notice route (single, twin, or 30-day). |
| Retain evidence of orientation (email invites, slides, attendance). | Flag employees who may require reasonable accommodation (disability, pregnancy) to comply with special laws. | Prepare the payroll computation and Certificate of Employment. |
8. Worker Remedies and Employer Exposure
- Illegal dismissal claims – Faulty procedure or lack of valid cause entitles the employee to full backwages, reinstatement (or separation pay in lieu), moral/exemplary damages, and attorney’s fees.
- Burden of proof – Always on the employer to show that dismissal was for a valid cause and with due process.
- Prescriptive period – Four (4) years from dismissal to file an illegal dismissal case.
9. Illustrative Case Digests (Selected)**
| Case | G.R. No. / Date | Ratio on Probationary Termination |
|---|---|---|
| Abbott Labs v. Alcaraz | 192571 / 23 Jul 2013 | Failure to give specific standards converts the employee into regular status; dismissal reversed. |
| Aliling v. Feliciano (Airborne) | 185829 / 25 Apr 2012 | Even if standards are set, employer must show fair evaluation process; coaching and metrics ignored, reinstatement ordered. |
| Mariwasa Siam v. Leogardo | L-63314 / 29 Jul 1986 | Probationary termination for redundancy requires 30-day notice and separation pay. |
| Magis Young Achievers v. Jabal | 234380 / 11 Jan 2021 | A school must observe twin-notice procedure for dismissal due to alleged misconduct even during probation. |
10. Quick Answers to Frequent Client Questions
| Question | Short Answer |
|---|---|
| Can we terminate a probationary employee “effective today” for failing evaluation? | Yes, if standards were set and you issue a written notice explaining the unmet standards. No 30-day lead time is required. |
| Do we owe DOLE a report for this? | Not for non-qualification or just-cause dismissals. Reports are required only for Article 298 authorized-cause terminations. |
| Must we give separation pay? | Only when the ground is an authorized cause or disease. |
| Is a preventive suspension allowed during investigation? | Yes, for just-cause cases posing serious risk, but it is not applicable to mere performance issues. |
| What if the six-month period lapses during the evaluation? | The employee becomes regular, and termination must follow the rules for regular employees. |
11. Conclusion
The “one-month notice rule” is often misunderstood. In Philippine labor law, it applies exclusively to authorized-cause terminations, whether the worker is probationary or regular. Dismissal for failure to meet probationary standards mandates only a written notice served within a reasonable time, provided the standards were crystal-clear from the start. Employers who map the correct legal ground to the proper procedure—and document every step—minimize exposure to illegal-dismissal suits. Employees, meanwhile, should be vigilant in demanding that standards be disclosed and that due process, even in its simplified form, is scrupulously respected.
(This article synthesizes the Labor Code of the Philippines, DOLE Department Order 147-15, and controlling Supreme Court decisions current as of 11 June 2025.)