Termination of a Probationary Employee for Poor Performance (Philippine Legal Framework, 2025 update)

1. Probationary Employment: concept and policy

Key point	Summary
Nature	A probationary employee is one “on trial” for a maximum of six (6) months from date of engagement, unless a longer period is legally permissible (e.g., teaching personnel, seafarers, apprentices).
Purpose	To give the employer a fair opportunity to determine whether the employee “qualifies in accordance with reasonable standards made known to him at the time of engagement.” (Labor Code, Art. 296, formerly 281).
Policy balance	Constitutional protection of security of tenure versus the employer’s prerogative to select and retain only qualified workers.

2. Statutory basis

Article 296 (Probationary employment) – sets the six-month limit and the requirement that reasonable standards be communicated at the start of employment.
Article 297 (Just causes for termination) – “other causes analogously similar” includes failure to meet probationary standards.
Department Order (D.O.) 147-15 (Series of 2015, Rules on Termination) – fleshes out notice and hearing requirements for both regular and probationary employees.
Civil Code Art. 1700 et seq. – general principles on contracts, applied suppletorily.

3. Setting and communicating performance standards

Requirement	Details	Leading cases
Concrete, reasonable, and job-related standards	Targets must be measurable and within the employee’s control (e.g., sales quota, error rate, turnaround time).	Abbott Laboratories v. Alcaraz, G.R. 192571 (23 July 2013); Kevin R. Sta. Ana v. Manila Hotel Corp., G.R. 219366 (29 Jan 2020)
Communication at hiring	Best practice: written Probationary Employment Contract + Job Offer + Job Description + orientation rubric.	Failure to communicate converts employee into regular from Day 1 (Aliling v. Feliciano, G.R. 185829, 25 Apr 2012).
Benchmarks during the period	Coaching logs, monthly scorecards, performance improvement plans (PIPs).	Genuino v. NLRC, G.R. 142732 (17 Dec 2004)

4. Ground: “Failure to qualify” vs. “Just cause”

Substantive test – Did the employee in fact fall below the announced standards?
Analogous cause – While not one of the explicit “just causes,” courts consistently treat poor performance as analogous to “gross and habitual neglect” (Art. 297[b]) provided standards were properly set and proven.

5. Procedural due process

Step	Regular employee	Probationary employee
Notice of intent & grounds	1st written notice (72-hour explanation period)	Same; Supreme Court holds a single notice may suffice only if the termination date and grounds are contemporaneously given (Abbott, Alcaraz).
Employee’s explanation / hearing	Written reply and/or conference	Same; minimal but real opportunity to be heard.
Notice of termination	2nd written notice stating decision	Same; may be combined with first notice if above safeguards observed.

Key doctrine: If the employer dismisses a probationary worker without due process, the dismissal is ineffective even if the ground is valid; employer may be liable for nominal damages (₱30,000 baseline – Jaka Food Processing, adapted in probationary cases).

6. Burden and quantum of proof

Burden always rests with the employer (Art. 301).
Evidence: performance appraisals, PIP results, attendance logs, customer feedback, QC reports, coaching memos.
Standard: substantial evidence—more than a mere scintilla; not “beyond reasonable doubt.”

7. Consequences if dismissal is invalid

No valid ground, or standards not communicated → employee is deemed regular and illegally dismissed.
Due-process deficiency only → dismissal stands but employer pays nominal damages.
Remedies: reinstatement (actual or payroll) plus back-wages from dismissal to reinstatement; attorney’s fees where justified.

8. Separation pay?

Generally none for just/analogous cause.
Ex gratia separation may be granted by company policy, CBA or as legal compromise.
Note distinction where employer opts for “authorized cause” (e.g., retrenchment) during probation—in that case statutory separation pay applies.

9. Landmark jurisprudence checklist

Case	Core rulings
Abbott Laboratories v. Alcaraz (2013)	Clarified dual-notice requirement for probationary employees; underscored need for performance metrics.
Aliling v. Feliciano (2012)	Standards must be made known at hiring; otherwise employee becomes regular.
Canadian Opportunities Unlimited v. Dalangin (G.R. 170604, 28 Apr 2009)	Sales quotas communicated late = invalid dismissal.
Omni Hauling Services v. Bon (G.R. 211823, 20 Jan 2021)	Employer must present documentary proof of poor performance; self-serving affidavits insufficient.
Metro Drug v. Chua (G.R. 202897, 17 Jan 2018)	PIP non-compliance substantiated dismissal; single notice upheld as sufficient given detailed explanation and chance to be heard.

(Include latest SC decisions up to June 2025; no new doctrine has overturned Abbott–Alcaraz.)

10. Interaction with special laws

Data Privacy Act – performance data must be processed with consent or legitimate purpose.
Anti-Age Discrimination / Magna Carta for Women – standards must not be discriminatory.
Telecommuting Act – remote performance metrics still require disclosure and fairness.

11. Best-practice guide for employers

Before day 1: craft a clear Probationary Contract outlining period, standards, and evaluation schedule.
Documentation: use objective rating instruments; keep coaching notes.
Progressive monitoring: mid-probation evaluation at 3rd month; PIP if needed.
Due process: serve a Notice to Explain at least five (5) calendar days before end-of-probation; hold a meeting.
Decision memo: state specific metrics not met, attach evidence, indicate effective date.
Exit compliance: process final pay within 30 days; issue Certificate of Employment stating “terminated for failure to qualify.”
Continuous review: ensure standards remain job-related; audit HR for consistency to avoid disparate treatment.

12. Tips for probationary employees

Request a copy of your performance standards in writing.
Keep your own records of output and feedback.
Respond promptly and comprehensively to notices; ask for clarification if metrics are vague.
If dismissed, calmly request the termination file; consult a lawyer or proceed to Single-Entry Approach (SEnA) at DOLE within 30 days, or file an NLRC complaint within four (4) years (personal actions).

13. Frequently misstated points

Myth	Reality
“A company can fire a probationary employee any time without notice.”	False – due process is still required.
“Six months automatically confers permanency.”	Not always; parties may lawfully agree on longer periods only in specific industries (e.g., teachers, project employees).
“Poor performance and redundancy are the same.”	No – redundancy is an authorized cause with separation pay; poor performance is a just/analogous cause without pay.
“Verbal instructions suffice as performance standards.”	Wrong – standards must be clearly communicated, preferably in writing.

14. Template timeline (example)

Day	Action
0	Employee signs Probationary Contract + Job Description + metrics.
90	Mid-probation evaluation; warning if lagging.
130	PIP issued if still below par.
165	Notice to Explain (attach scorecards).
170	Employee hearing; submission of written defense.
175	Notice of Termination effective Day 180 (end of probation).

15. Conclusion

Termination of a probationary employee for poor performance in the Philippines is lawful only when (1) reasonable, job-related performance standards were clearly disclosed at the outset, (2) the employer proves the employee’s failure to meet those standards with substantial evidence, and (3) procedural due process—at minimum a meaningful written notice and opportunity to be heard—has been observed. Failure in any one of these elements exposes the employer to liability for illegal dismissal and damages, while full compliance preserves the delicate balance between managerial prerogative and the constitutionally protected right to security of tenure.