As I provided a sample probationary employment contract in my last post I thought I would discuss probationary status a bit further.
Most businesses in the Philippines start their employees as probationary. It’s rumored even that some extremely large businesses circumvent the law by treating their employees as permanently probationary (yes that’s an oxymoron).
With such rumors common place, some employees can be wary of probationary periods and may (fairly or not) see them as yet another means of the employer extracting maximum work from them for minimal pay.
Hopefully some of the Q and A below can help dispel some of the doubts regarding probationary employment status.
How long can a probationary period be? – Six months (Article 281 of the Labor Code).
Can the probationary period be shorter? – Yes, the period can be shorter at the option of the employer. So it can be a month, 3 months, 5 months; however length of time as long as it does not exceed 6 months.
Can the probationary period be extended? – Yes, it can be extended at the option of the employer. If at the end of the initial probationary period (whatever length it may be) the employer determines that the employee has not met the criteria for regularization but has potential if given more time, then he may choose to extend the period. The extension is supposed to allow the employee more time to learn the skills he needs to fulfill his job function. (Mariwasa Manufacturing vs. Leogardo, GR No. 74246)
Does an employee automatically become regular at the end of the probationary period? – No. At the end of the probationary period the employee has to demonstrate that he has learned the skills he needs to fulfill his job function.
If the probationary period is extended does that mean an employee will automatically become regular at the end of the extended period? – No. Again, the employee still has to prove that he has what it takes to be a regular employee.
Is a probationary employee entitled to holiday pay? – Yes. The law states that employees are entitled to holiday pay (Articles 93 and 94 of the Labor Code). As the law doesn’t distinguish between regular and probationary employees (it simply states employees or workers) the employer cannot distinguish between them as well (for purposes of holiday pay).
Is a probationary employee entitled to 13th month pay? – Yes. A 2013 labor advisory from DOLE stresses that all rank and file employees, “regardless of their position, designation or employment status” are entitled to 13th month pay.
Are probationary employees entitled to leave? – No. For workers to qualify for leave (or Service Incentive Leave as it’s termed under the law) they must have worked for a minimum of one year with their employer. As the maximum term of a probationary employee is 6 months (assuming the period is not extended) then a probationary employee can never have worked with their employer for at least a year.
Are probationary employees covered under the mandatory contributions for SSS, Pag-ibig and Phil-Health? – Yes. Both the employer and employee are required to submit their respective contributions even though the employee is on probationary status. Again, the rationale here is that the law governing those three institutions does not distinguish between the status of the employee so we cannot distinguish as well.
What’s the difference between a trainee and probationary employee? – A trainee could be a regular employee while a probationary employee is never a regular employee. For small business owners I suggest, to avoid any doubt, just use probationary or regular status. Designating employees as trainees just confuses everyone. (Trainees are also different from apprentices but that’s a different bag of worms.)