Probationary Employees: Employer’s Right to Set Standards and Consequences of Due Process Violations

G.R. No. 122866, June 19, 1997

Imagine starting a new job, eager to prove yourself, only to find yourself dismissed before you even have a chance to truly settle in. This scenario highlights the delicate balance between an employer’s right to assess probationary employees and the employee’s right to due process, a core principle in Philippine labor law. The Supreme Court case of Melva Nath vs. National Labor Relations Commission sheds light on this very issue, providing crucial insights for both employers and employees navigating probationary employment.

Understanding Probationary Employment in the Philippines

Probationary employment in the Philippines is governed primarily by Article 281 of the Labor Code, which states:

“ART. 281. Probationary employment.— 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.”

This provision allows employers a trial period to assess a new employee’s suitability for a permanent position. However, this right is not absolute. The employer must communicate clear and reasonable standards to the employee at the start of the probationary period. Failure to meet these standards, or a just cause, can lead to termination.

The concept of “just cause” is further defined in the Labor Code and jurisprudence, encompassing serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud or willful breach of trust, and commission of a crime or offense against the employer or his family.

The Case of Melva Nath: A Probationary Employee’s Dismissal

Melva Nath was hired as the Director of Rooms at Shangri-La Hotel Manila on a six-month probationary basis. Before her probationary period ended, she was dismissed. The reason cited was her alleged poor work performance and absences.

Nath filed a complaint for illegal dismissal, arguing that she was not afforded due process and that her work performance was never properly evaluated. The Labor Arbiter initially ruled in her favor, but the National Labor Relations Commission (NLRC) reversed the decision, finding just cause for her dismissal, although acknowledging a lack of due process.

The Supreme Court, in reviewing the NLRC’s decision, focused on two key issues:

• Whether there was just cause for Nath’s dismissal.
• Whether Nath was afforded due process.

The Court acknowledged that Nath was dismissed without due process, emphasizing that employers must provide two written notices before terminating employment:

1. A notice informing the employee of the specific acts or omissions that could lead to dismissal.
2. A subsequent notice informing the employee of the employer’s decision to dismiss, clearly stating the reasons.

However, the Court also affirmed the NLRC’s finding that just cause existed for Nath’s dismissal. The Court emphasized that her work ethic and performance fell short of the reasonable standards set by her employer. Citing that, “Unfortunately, her work ethics and performance fell short of the reasonable standards set by her employer.”

The Supreme Court ultimately ruled that while the dismissal was for just cause, the lack of due process meant that Nath was not entitled to reinstatement, backwages, damages, or attorney’s fees. The Court cited the Wenphil Corporation vs. NLRC case, emphasizing that a lack of due process does not negate the existence of just cause.

Practical Implications for Employers and Employees

This case highlights the importance of clear communication and adherence to due process in probationary employment. Employers must clearly define performance standards at the outset and provide regular feedback to probationary employees. They must also follow the proper procedure for termination, including providing the required notices.

For employees, this case underscores the need to understand the terms of their probationary employment and to actively seek feedback on their performance. It also highlights the importance of documenting their work and addressing any concerns raised by their employer.

Key Lessons

• Clear Standards: Employers must clearly communicate performance standards at the beginning of the probationary period.
• Due Process: Employers must follow the proper procedure for termination, including providing the required notices.
• Documentation: Employees should document their work and address any concerns raised by their employer.
• Just Cause: Even with a lack of due process, a dismissal for just cause can be upheld, albeit without the usual remedies for illegal dismissal.

Frequently Asked Questions

Q: What is probationary employment in the Philippines?

A: Probationary employment is a trial period, not exceeding six months (unless extended by an apprenticeship agreement), during which an employer assesses an employee’s suitability for a regular position.

Q: Can an employer dismiss a probationary employee at any time?

A: No. An employer can only dismiss a probationary employee for just cause or failure to meet reasonable performance standards communicated at the start of the employment.

Q: What is “just cause” for dismissal?

A: Just cause includes serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud, or commission of a crime against the employer.

Q: What is due process in the context of dismissal?

A: Due process requires the employer to provide two written notices: one informing the employee of the grounds for dismissal and another informing the employee of the decision to dismiss.

Q: What happens if an employer dismisses a probationary employee without due process but for just cause?

A: The dismissal may be upheld, but the employee is typically not entitled to reinstatement, backwages, damages, or attorney’s fees.

Q: What should an employee do if they believe they were illegally dismissed during their probationary period?

A: The employee should consult with a labor lawyer to assess their legal options and potentially file a complaint with the National Labor Relations Commission (NLRC).

Q: How long does an employee have to file a complaint for illegal dismissal?

A: Generally, an employee has three (3) years from the date of dismissal to file a complaint for illegal dismissal.

Q: What are the key things an employer should do to ensure a legal probationary period?

A: Clearly define performance standards, communicate those standards to the employee, provide regular feedback, and follow due process when considering termination.

Q: What if the employer doesn’t have written standards?

A: While written standards are preferred, the employer must prove that the standards were communicated to the employee and that they were reasonable.

ASG Law specializes in labor law in the Philippines. Contact us or email hello@asglawpartners.com to schedule a consultation.