I. Overview

Probationary employment in the Philippines allows an employer to observe a new hire’s fitness for a role within a limited period, while still affording the employee security of tenure. A probationary employee may be terminated only for:

a just cause; 2) an authorized cause; or 3) failure to meet reasonable standards made known at the time of engagement. Any dismissal outside these grounds—or without the required procedure—exposes the employer to illegal dismissal liability.

This article consolidates the governing rules, due-process requirements, and practical guidance for employers and employees.

II. Legal Foundations

Statutory basis. The Labor Code (as renumbered) recognizes probationary employment and permits termination within the probationary period for cause or failure to meet pre-communicated standards.
Security of tenure. Even on probation, an employee may be removed only for lawful cause and with due process.
Burden of proof. The employer bears the onus of proving both the lawful ground and observance of due process.

III. Nature and Duration of Probation

Default duration: up to six (6) months from the start of actual work, unless a longer period is fixed by law (e.g., apprenticeship) or validly agreed upon for roles requiring a longer evaluation (must be reasonable and clearly expressed).
Computation tips: Count actual service days; periods where the employee did not work (e.g., long leaves not attributable to the employer) may be excluded, provided the arrangement is fair and documented.
Extension: Permissible only with the employee’s informed, voluntary consent, for valid reasons (e.g., insufficient observation period due to extended absences). Extensions should be in writing, specify the new end date, and not be used to circumvent regularization.

IV. Standards for Regularization

A. Mandatory Communication “At the Time of Engagement”

A cornerstone rule: the reasonable performance standards for the job must be made known to the probationary employee at the time of hiring. If not, the employee is deemed regular from day one and may no longer be terminated for “failure to qualify.”

Effective ways to communicate standards:

Employment contract with a Probationary Clause spelling out duties, specific metrics/benchmarks, and the probation length.
Onboarding materials: job descriptions, KPI scorecards, code of conduct, attendance/performance policies.
Signed acknowledgments of handbooks and performance plans.
Orientation decks or training modules provided at or before start of work.

B. Reasonableness and Relevance

Standards must be reasonable, measurable (where practicable), and job-related—e.g., sales quotas for sales roles, accuracy and turnaround time for operations, client satisfaction for service roles, and core behavioral expectations (punctuality, honesty, teamwork).

C. Documentation Throughout

Coaching and feedback logs (dates, topics, commitments).
Performance appraisals (mid-probation and pre-decision).
Performance Improvement Plans (PIP) with clear targets, timelines, and support.
Incident reports for behavioral or integrity issues. Consistent, contemporaneous documentation is often dispositive in disputes.

V. Lawful Grounds to Terminate a Probationary Employee

Just Causes (employee’s fault): serious misconduct, willful disobedience, gross and habitual neglect, fraud or breach of trust, commission of a crime against the employer or co-workers, and analogous causes.
Authorized Causes (business exigency, not the employee’s fault): redundancy, retrenchment to prevent losses, closure/cessation of business, or installation of labor-saving devices; also disease requiring separation when conditions apply.
Failure to Qualify under reasonable, pre-communicated standards during probation.

VI. Due Process Requirements

A. For Just Cause (Fault-Based) Dismissals

Twin-notice rule with opportunity to be heard:

First notice (charge sheet): states the specific acts/omissions, legal and factual bases, and gives the employee a reasonable period to explain (commonly 5 calendar days).
Opportunity to be heard: written explanation and/or administrative conference or hearing where the employee can present evidence and rebut allegations.
Second notice (decision): clearly states the findings, the particular just cause, and the effective date of termination.

B. For Authorized Causes

Thirty (30) days’ prior written notice to the employee and to the Department of Labor and Employment (DOLE).
Payment of separation pay where required (see Section IX).
Observe fair and objective selection criteria (for redundancy/retrenchment).
Prepare board/management resolutions, feasibility or cost-saving studies, and notices that establish business necessity.

C. For Failure to Meet Probationary Standards

Philippine jurisprudence emphasizes procedural fairness even when the ground is failure to qualify. At minimum:

Written notice that the employee failed to meet specific, pre-communicated standards, with supporting evaluations.
Opportunity to respond (written explanation and/or meeting).

Best practice: mirror the twin-notice framework used for just cause (charge → hearing → decision). While some decisions have treated this as a single-notice situation, applying the fuller procedure substantially reduces risk.

VII. Substantive Requirements (What Employers Must Prove)

The standards were conveyed at hiring and are reasonable and relevant.
The employee was afforded a genuine evaluation period with coaching and tools to succeed.
Substantial evidence supports the conclusion of failure to meet standards (e.g., KPI reports, QC error logs, client complaints, PIP non-compliance).
For just/authorized causes, the statutory elements of the cause are satisfied.

If any piece is missing—especially proof that standards were disclosed at the start—the dismissal is likely to be declared illegal.

VIII. Effects of Non-Compliance

Illegal dismissal: If the ground fails or due process is not observed.
Remedies may include:
- Reinstatement (with backwages) or separation pay in lieu of reinstatement if reinstatement is impracticable.
- Backwages:
  - If the employee should have been regularized (because standards were not disclosed at hiring), backwages may extend until actual reinstatement or finality of judgment.
  - If the employee remained probationary and was illegally dismissed, backwages commonly run up to the end of the probationary term (or until lawful termination), plus differentials and benefits.
- Nominal damages for due-process lapses even where the substantive ground exists.
- Moral/exemplary damages and attorney’s fees in cases showing bad faith or oppressive conduct.

IX. Pay, Separation Pay, and Final Pay

Just cause: No separation pay (save for equity/compassion in rare cases).
Authorized causes: Separation pay is generally 1 month pay or ½ month pay per year of service, depending on the ground, following statutory rules; fractions of at least six months count as a full year. Probationary status does not disqualify an employee from separation pay when due.
Final pay: Release of last salary, monetized leave (if company policy grants it), prorated 13th month pay, and other accrued benefits; plus the Certificate of Employment upon request.

X. Special Issues and Edge Cases

Lack of disclosed standards at hiring → employee becomes regular; termination must be on just/authorized cause with full due process.
Shifting or moving standards mid-probation → risky unless reasonable, documented, communicated, and the employee is given time to meet them.
“No-fault” separations during probation (e.g., “not a culture fit”) without disclosed standards → generally invalid.
Attendance and punctuality: enforceable if part of communicated standards and consistently applied.
Integrity/biometrics falsification: often a just cause (serious misconduct or fraud), not merely failure to qualify.
Project-based/seasonal workers: different regimes; probationary rules typically do not apply.
Fixed-term contracts masquerading as probation**:** scrutinized for circumvention of security of tenure.
Discrimination: Terminations based on protected attributes (sex, gender, pregnancy, disability, age where protected, union membership, whistleblowing, or other unlawful grounds) are void.
Quitclaims: Valid only if voluntary, with reasonable consideration, and no fraud or coercion; otherwise challengeable.

XI. Constructive Dismissal During Probation

A probationer may claim constructive dismissal where the employer makes continued work impossible, unreasonable, or unlikely, e.g., demotions, drastic pay cuts, intolerable harassment, or punitive schedules. The test is whether a reasonable person would feel compelled to resign. If found, remedies track illegal dismissal consequences.

XII. Practical Checklists

A. Employer Compliance Checklist

At Hiring

□ Written contract identifies probation period and specific performance/behavioral standards.
□ Employee signs acknowledgments (job description, KPIs, handbook, policies).
□ Orientation given before or on Day 1; provide copies or portal access.

During Probation

□ Mid-probation review with documented feedback.
□ Coaching and resources (training, tools).
□ PIP (if needed) with clear, dated targets and support.
□ Consistent enforcement across similarly situated employees.

Before Termination

□ Verify that the disclosed standards match the grounds.
□ Gather substantial evidence (evaluations, stats, reports).
□ Serve notices in line with the applicable ground (twin-notice or authorized-cause notice to DOLE + employee).
□ Conduct conference/hearing as appropriate; record minutes.
□ Issue a reasoned decision with the effective date; compute final pay/separation pay as applicable; prepare COE.

B. Employee Self-Audit

□ Did the employer tell me the standards at hiring? Do I have copies?
□ Did I receive coaching, tools, and fair time to improve?
□ Do the evaluation records match what I was told to meet?
□ Was I given a real chance to explain?
□ Are others similarly situated treated consistently?
□ Are there indications of discrimination, retaliation, or bad faith?

XIII. Model Clauses & Templates (Snippets)

Probation and Standards Clause “You are engaged as a probationary employee for six (6) months commencing on your start date. Confirmation to regular status depends on meeting the standards set out in Annex A (KPIs and Behavioral Expectations), which have been explained to you today and provided in the Employee Portal. The Company will conduct periodic evaluations and a final review before the end of probation.”

Notice of Failure to Qualify (First Notice) “Our evaluations dated [dates] show you did not meet the following standards communicated at hiring: [specific metrics/behavior]. Please submit a written explanation within five (5) calendar days. You may also attend an explanatory meeting on [date/time] and submit supporting documents.”

Decision Notice (Second Notice) “After considering your explanation and records, we find that you did not meet the following probationary standards: [details]. Your employment is terminated effective [date]. Your final pay will include [items]. Please coordinate with HR for clearance and your Certificate of Employment.”

Authorized-Cause Notice (Redundancy) “Due to [business reason], your position is declared redundant effective [date]. This serves as the 30-day prior notice to you and to DOLE. You will receive separation pay of [rate] plus final pay components, to be released on [date].”

(Tailor language to the facts; avoid conclusory phrases; always attach evaluation and policy references.)

XIV. Frequently Asked Questions

1) Can we terminate a probationer “anytime” within six months? Only for lawful grounds and with due process. Probation is not carte blanche to dismiss at will.

2) Do we need twin notices for failure to qualify? At minimum, give written notice of failure to meet pre-communicated standards and a real chance to respond. Best practice is to use the twin-notice format to minimize risk.

3) If the employee barely started, can we end for “non-fit”? If standards were properly disclosed and early performance/behavior objectively shows failure to qualify, yes—with procedure and evidence. Absent disclosed standards, risk of illegality is high.

4) Does separation pay apply to probationers? For authorized causes, yes—statutory separation pay applies regardless of probationary status. For just cause, generally no.

5) The probationer went on extended leave. Can we extend probation? Potentially, with the employee’s informed written consent, citing need for sufficient observation time. Avoid open-ended or repetitive extensions.

XV. Key Takeaways

Disclose standards at hiring—or risk immediate regularization.
Document evaluations and support throughout probation.
Match the ground (just, authorized, or failure to qualify) with the correct procedure.
Serve notices properly and provide a genuine opportunity to be heard.
Prepare evidence sufficient to meet the substantial evidence standard.
Compute entitlements accurately at exit; issue COE upon request.

Handled correctly, probation protects both sides: it gives employers a structured way to evaluate fit, and gives employees fair notice, support, and protection from arbitrary dismissal.