GROUNDS FOR TERMINATION OF A PROBATIONARY EMPLOYEE

Dear PAO,

I just graduated from college and immediately applied with XYZ company as a medical representative.
The company made me sign a contract of employment on probationary basis for six months. On my first
day of work, the company informed me of my itinerary, salary and other benefits. They also issued a car
that I can use on the field. On my 3rd month, the HR served me a termination notice for failure to reach
the required sales quota. I was surprised to know that there was a sales quota. Was I validly terminated
from work?

Felecine

Dear Felecine,

A probationary employee is governed by the provision of Article 295 of Presidential Decree 442 (Labor
Code of the Philippines), as amended. The said law states:

“Probationary employment shall not exceed six (6) months from the date the employee started working,
unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an
employee who has been engaged on a probationary basis may be terminated for a just cause or when
he fails to qualify as a regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.”

Correlative thereto, Section 6 (d), Rule 1, Book Six of the Omnibus Rules Implementing the Labor Code of
the Philippines also provides:

“In all cases of probationary employment, the employer shall make known to the employee the
standards under which he will qualify as a regular employee at the time of his engagement. Where no
standards are made known to the employee at that time, he shall be deemed a regular employee.”

This rule was further explained in the case of Abbot Laboratories et al. vs. Alcaraz (G.R. No. 192571, July
23,2013), where the Supreme Court through Honorable Associate Justice Estela M. Perlas-Bernabe
stated:

“A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of
probationary employment, aside from just or authorized causes of termination, an additional ground is
provided under Article 295 of the Labor Code, i.e., the probationary employee may also be terminated
for failure to qualify as a regular employee in accordance with the reasonable standards made known by
the employer to the employee at the time of the engagement. Thus, the services of an employee who
has been engaged on probationary basis may be terminated for any of the following: (a) a just or (b) an
authorized cause; and (c) when he fails to qualify as a regular employee in accordance with reasonable
standards prescribed by the employer.

xxxx xxxx xxxx xxxxxxxx

In other words, the employer is made to comply with two (2) requirements when dealing with a
probationary employee: first, the employer must communicate the regularization standards to the
probationary employee; and second, the employer must make such communication at the time of the
probationary employee’s engagement. If the employer fails to comply with either, the employee is
deemed as a regular and not a probationary employee.”

Applying the above cited decision in your situation, your employer failed to communicate to you, at the
time of your engagement, the reasonable standards such as the “sales quota” that you should meet for
regularization.

With the failure on the part of your employer to comply with any of said requirements, your
employment shall be deemed regular. Therefore, your employer has no legal basis to terminate your
employment on the ground that you failed to meet the “sales quota” because this is a ground for
termination of a probationary employee. Consequently, your services as a regular employee shall not
also be terminated except for just or authorized causes.