I. Overview: Probationary Employment in Philippine Law

Probationary employment is a recognized employment status under Philippine labor law intended to allow an employer to observe and evaluate whether a worker meets the reasonable standards for regularization. It is not “casual” employment, nor is it at-will. A probationary employee enjoys security of tenure during the probation period and may be dismissed only for legally permitted reasons and through legally required procedures.

The governing framework is found primarily in:

The Labor Code of the Philippines (as amended), particularly the provisions on regularization and termination; and
Implementing rules and long-standing jurisprudence that define what “due process,” “valid cause,” “notice,” and “standards for regularization” mean in probationary settings.

Probationary status is, at its core, conditional regular employment: the employee is on track to become regular unless the employer lawfully ends the relationship during the probationary window based on a recognized ground and compliant process.

II. The Probationary Period: Duration and Structure

A. General Rule: Six-Month Cap

As a general rule, the probationary period must not exceed six (6) months from the date the employee starts working. If the employee continues working after the probationary period without a valid termination, the employee is deemed regular by operation of law.

B. Exceptions: Longer Periods in Specific Cases

In some occupations, a longer probationary period may be permitted if:

It is covered by special laws, regulations, or industry standards; or
It is justified by the nature of the work and is consistent with applicable rules (e.g., certain professional, technical, or academic arrangements may follow sector-specific standards).

However, employers should not assume they can unilaterally extend probation beyond six months absent a recognized basis. Improper extension can expose the employer to a finding that the employee became regular.

C. Extension of Probation: When It Can Happen (and Risks)

Extension is not a default right. It may be defensible in limited scenarios (e.g., by mutual agreement, or where the probationary evaluation period was interrupted by circumstances that prevent meaningful assessment), but it is frequently challenged. In practice, if an employee works past the original probation end date, the presumption of regularization becomes difficult to overcome.

III. Grounds to Terminate a Probationary Employee

A probationary employee may be terminated only for:

Just causes (employee fault-based grounds);
Authorized causes (business/economic/health grounds); or
Failure to qualify as a regular employee in accordance with reasonable standards made known at the time of engagement (the ground uniquely associated with probationary employment).

Each ground has distinct substantive and procedural requirements.

IV. Termination for Failure to Meet Probationary Standards

A. The Central Requirement: Standards Must Be Reasonable and Made Known at Engagement

For termination based on failure to qualify, the employer must show:

There were reasonable standards for regularization; and
Those standards were communicated to the employee at the time of engagement.

“Time of engagement” generally means at hiring or at the start of employment—not midway through probation, and not only after issues arise.

Best practice forms of communication include:

Employment contract clauses specifying standards;
Job descriptions with measurable expectations;
Employee handbooks/policies acknowledged in writing;
Performance evaluation tools disclosed at onboarding;
Written performance targets or competency matrices.

If standards were not made known at engagement, termination for “failure to qualify” is vulnerable to being declared illegal. The employer may still attempt to justify termination under just cause or authorized cause, but “failure to qualify” becomes difficult to sustain.

B. What Makes Standards “Reasonable”

Reasonableness typically means the standards are:

Related to the job and legitimate business needs;
Capable of being achieved with normal diligence;
Not arbitrary, discriminatory, or impossible; and
Applied in good faith and consistently.

Standards should be objective where possible (e.g., accuracy, output, error rates, timeliness, sales quotas with proper support, compliance metrics), but may also include behavioral and competency expectations if clearly defined (e.g., teamwork, customer service benchmarks, adherence to protocols).

C. Evaluation and Documentation

Although not every shortcoming requires a formal performance improvement plan, employers are expected to act in good faith. Documentation is crucial to show that:

Performance was assessed against the disclosed standards;
The employee was apprised of issues (preferably in writing);
The decision was based on actual evaluation, not pretext.

Common documentation includes:

Written coaching memos;
Evaluation forms at set intervals;
Incident reports (if performance issues are tied to specific events);
Attendance and productivity records;
Customer complaints with verification.

D. Timing of Termination for Failure to Qualify

Termination must occur within the probationary period. If the employee is allowed to continue working beyond the probation end date, the employee generally becomes regular, making “failure to qualify” no longer available as a probationary basis.

V. Termination for Just Causes During Probation

Probationary employees may be dismissed for the same just causes applicable to regular employees, such as serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud or breach of trust, commission of a crime against the employer or its representatives, and analogous causes.

A. Substantive Standard

The employer must prove the alleged misconduct or fault with substantial evidence. Being probationary does not reduce the employer’s burden to establish the factual basis for dismissal.

B. Procedural Due Process: The “Two-Notice Rule” and Hearing Opportunity

For just cause termination, Philippine labor standards require:

First Notice (Notice to Explain / Charge Notice)
- Specifies the acts/omissions complained of;
- Cites the rule/policy violated (if applicable);
- Directs the employee to submit a written explanation within a reasonable period.
Opportunity to Be Heard
- Not always a full-blown trial-type hearing, but a genuine chance to respond, clarify, present evidence, and rebut accusations.
- May be through a hearing/conference or written submissions, depending on the circumstances, but must be meaningful.
Second Notice (Notice of Decision)
- Communicates the employer’s decision to dismiss;
- States the reasons and findings supporting dismissal.

Failure to follow this procedure can result in liability for violation of procedural due process even if a valid ground existed.

VI. Termination for Authorized Causes During Probation

Probationary employees may also be terminated for authorized causes, typically business-related or health-related grounds, such as:

Redundancy;
Retrenchment to prevent losses;
Closure or cessation of business;
Installation of labor-saving devices; and
Disease where continued employment is prohibited or prejudicial and legally supported.

A. Substantive Standard

The employer must meet the legal requirements specific to the authorized cause (e.g., redundancy requires a good faith reorganization and fair, reasonable criteria; retrenchment requires proof of actual or imminent losses and good faith).

B. Notice Requirements: Employee and DOLE

For authorized cause termination, the employer must generally provide:

Written notice to the employee; and
Written notice to the Department of Labor and Employment (DOLE)

These notices must be served within the legally required period (commonly a 30-day prior notice rule in standard authorized causes). Additionally, separation pay may be due depending on the authorized cause and circumstances.

Because authorized causes are highly technical and fact-specific, employers must ensure strict compliance with documentation and notice service requirements.

VII. Due Process and Notice Requirements Specific to Probationary Termination

A key point in Philippine practice is that probationary employees are entitled to due process, but the procedure depends on the ground:

A. If the ground is just cause

Two notices + opportunity to be heard (as discussed).

B. If the ground is authorized cause

Statutory notices to employee and DOLE (within the prescribed period) + separation pay if applicable.

C. If the ground is failure to qualify based on probationary standards

The law recognizes that this is not a disciplinary dismissal in the same sense as just cause, but some form of notice is still expected.
At minimum, the employer should provide a written notice of termination stating that the employee did not meet the reasonable standards for regularization and briefly identifying the standards/areas where the employee fell short, anchored on documented evaluation.
While the classic “two-notice rule” is most strictly associated with just cause, employers commonly adopt a procedure that includes:
- Written advisories or evaluation memos during probation; and
- A final written notice of non-regularization/termination before probation ends.

This approach reduces disputes about good faith and helps show that termination was genuinely based on failure to qualify rather than disguised discipline or discrimination.

VIII. The Burden of Proof and What Must Be Proven

In termination disputes, employers generally bear the burden of proving that dismissal was for a valid cause and that due process was observed.

A. For failure to qualify

The employer should be able to show:

The employee was probationary (validly hired as such);
Reasonable regularization standards existed;
These standards were communicated at engagement;
The employee failed to meet the standards; and
Termination occurred within the probationary period, with written notice.

B. For just cause

The employer must show:

The act complained of occurred and constitutes a just cause; and
Two notices and opportunity to be heard were provided.

C. For authorized cause

The employer must show:

The authorized cause existed and was implemented in good faith with required criteria; and
Required notices to employee and DOLE were served; and
Separation pay was properly paid when required.

IX. Common Legal Pitfalls (and Why Terminations Get Struck Down)

1. No proof that standards were disclosed at hiring

A frequent reason probationary terminations are invalidated is the employer’s failure to prove that the standards for regularization were made known at the time of engagement.

2. Vague or shifting standards

Standards that are overly generic (“must be competent,” “must have good attitude”) without defined indicators may be attacked as arbitrary. Standards introduced late or changed without clear communication are also vulnerable.

3. Termination after the probation period lapses

Allowing a probationary employee to keep working beyond the probation end date generally results in regularization. Terminating thereafter using “failure to qualify” typically fails.

4. Treating failure-to-qualify as a shortcut for discipline

If the real reason is misconduct, employers must follow the just cause route and its procedural safeguards. Re-labeling misconduct as “failed probation” is commonly challenged.

5. Lack of documentation and inconsistent application

When evaluation records are absent or when similarly situated employees are treated differently without justification, employers risk findings of bad faith, discrimination, or pretext.

6. Non-compliance with authorized cause notices and separation pay

For redundancy/retrenchment/closure and similar grounds, failure to notify DOLE or failure to pay proper separation pay can invalidate or complicate the termination.

X. Interaction with Anti-Discrimination, Retaliation, and Protected Rights

Even in probation, termination must not be based on unlawful grounds such as discrimination or retaliation. Common risk areas include:

Dismissal linked to pregnancy, gender, disability, religion, or other protected attributes;
Retaliation for filing complaints, reporting violations, or participating in investigations;
Termination tied to legitimate exercise of labor rights (e.g., lawful organizing activities).

Where an employee alleges discrimination or retaliation, employers should be prepared to show a legitimate, documented, and standards-based basis for termination, applied consistently.

XI. Notice Content and Service: Practical Requirements

A. Elements of a strong written notice (failure to qualify)

A written notice of non-regularization/termination should include:

Employee details and employment dates;
Statement that employment is probationary;
Reference to the disclosed standards for regularization (e.g., contract clause, job description, handbook acknowledgment);
Summary of evaluation results and specific deficiencies relative to standards (avoid conclusory labels);
Effective date of termination (must be within probation);
Instructions on final pay, return of company property, and clearance process.

B. Elements of notices for just cause

Charge notice should be specific and detailed enough for the employee to respond meaningfully.
Decision notice should state findings and reasons, not just conclusions.

C. Service and proof

Notices should be served in a way that creates proof of receipt:

Personal service with signed acknowledgment; and/or
Registered mail/courier with tracking and delivery confirmation; and/or
Company email system with delivery logs (as supplemental proof), depending on workplace practice.

XII. Final Pay and Clearance Considerations

Termination—whether during probation or otherwise—triggers obligations such as:

Payment of earned wages;
Pro-rated 13th month pay if applicable;
Payment of unused service incentive leave or other convertible benefits, if applicable;
Any separation pay if termination is due to an authorized cause that requires it;
Issuance of employment records typically required by labor standards and regulations (as applicable).

Employers should avoid withholding final pay without lawful basis. Clearance procedures should be reasonable and should not be used to coerce waivers.

XIII. Quitclaims, Waivers, and Settlements

Employers sometimes seek quitclaims upon separation. In Philippine labor practice, quitclaims are scrutinized and may be invalidated if:

The employee did not voluntarily execute it;
Consideration is unconscionably low;
There is fraud, mistake, intimidation, or undue pressure; or
It is used to defeat statutory rights.

If used, quitclaims should be supported by fair consideration and a demonstrably voluntary process, but they do not automatically immunize an employer from illegal dismissal findings.

XIV. Remedies and Consequences of Illegal Probationary Dismissal

If termination is declared illegal, consequences may include:

Reinstatement (or separation pay in lieu, depending on circumstances);
Full backwages computed from dismissal up to reinstatement/finality, depending on the adjudication;
Damages and attorney’s fees in appropriate cases (e.g., bad faith, oppressive conduct, or when compelled to litigate).

If the ground is valid but procedural due process was defective (commonly in just cause cases), the employer may be liable for monetary sanctions for procedural violations even if dismissal is upheld as substantively valid.

XV. Practical Compliance Blueprint for Employers (Philippine Setting)

A. At Hiring (Day 1 compliance)

Execute a written probationary employment contract;
Attach or reference clear standards for regularization;
Provide job description, KPIs, competency expectations;
Obtain signed acknowledgments for handbook/policies and standards.

B. During Probation (good faith evaluation)

Conduct periodic evaluations (e.g., 30/60/90-day reviews where feasible);
Document coaching and performance gaps;
Provide reasonable support/training consistent with role.

C. If Termination Is Considered

If misconduct/fault is involved: use just cause procedure (two notices + hearing opportunity).
If business/health grounds: comply with authorized cause rules (notice to employee and DOLE; separation pay where required).
If failure to qualify: ensure standards were disclosed at engagement; prepare documentation; issue written notice of termination within probation.

D. Before the Probation End Date

Audit all probationary employees’ status at least several weeks before the six-month deadline to avoid inadvertent regularization by lapse.

XVI. Practical Guide for Employees

A probationary employee who is terminated should examine:

Was I told at hiring what standards I needed to meet to be regularized?
Did the employer explain, in writing, why I allegedly failed those standards?
Was I terminated within the probation period?
If the reason was misconduct, was I served a charge notice and given a chance to explain?
If the reason was redundancy/retrenchment/closure, was DOLE notified and was separation pay addressed?

If documentation is absent, standards were not disclosed at hiring, or procedural steps were skipped, the termination may be challengeable under Philippine labor dispute mechanisms.

XVII. Key Takeaways

Probationary employees have security of tenure during probation and may be terminated only for valid causes recognized by law.
For failure to qualify, employers must prove reasonable regularization standards were made known at the time of engagement and that the employee failed to meet them, with termination effected within the probation period.
For just causes, the two-notice rule and a meaningful opportunity to be heard are essential.
For authorized causes, statutory notice (including to DOLE) and separation pay rules must be followed where applicable.
Documentation, good faith evaluation, and timely action before the probation deadline are decisive in avoiding illegal dismissal findings.