Probationary employment is an arrangement where an employee is placed on trial by the employer for a period of time, not to exceed six months, to allow the employer to determine whether the employee is fit for regularization. Probationary employment is beneficial for employers as it allows them to address problems in the employment relationship before regularization. Probationary employees may also be terminated for failure to qualify as regular employees in accordance with reasonable standards made known to the employee. However, employers must exercise caution in hiring probationary employees by ensuring that they notify the employee of his or her probationary status and the reasonable standards that would qualify the employee to be regularized at the time of the employee’s engagement. Failure of the employer to comply with these obligations may result in a finding that the probationary employee is a regular employee, who may only be dismissed for just and authorized causes.
In Edna Luis B. Simon v. The Results Companies and Joselito Sumcad (G.R. Nos. 249351-52, 29 March 2022), despite working for the employer for only two months, the employee was awarded back wages equivalent to almost eight years of work.
In this case, the employee was asked to stop reporting to work after working for only two months with the company. The Labor Arbiter and the National Labor Relations Commission ruled that the employee was illegally dismissed, but regarded the employee as a probationary employee and, thus, awarded back wages equivalent to the remaining months of her probationary period of employment. On appeal, the Court of Appeals ruled that the employee was a regular employee, but it found that she failed to prove the fact of her dismissal. Thus, the Court of Appeals ordered that the employee be reinstated to her former position without payment of back wages.
Both parties filed an appeal with the Supreme Court, which ruled that the employee was a regular employee. The Supreme Court held that to validly place an employee under probationary status, the employer must comply with two requirements: [a] communicate the regularization standards to the probationary employee; and [b] make such communication at the time of the probationary employee’s engagement. If the employer fails to comply with these two requirements, the employee is deemed a regular employee, and not a probationary employee. “An employer is deemed to have made known the regularization standards when it has exerted reasonable efforts to apprise the employee of what he or she is expected to do or accomplish during the trial period of probation. The exception to the foregoing is when the job is self-descriptive in nature, such as in the case of maids, cooks, drivers, and messengers.”
Having admitted that the employee was its probationary employee, it was incumbent upon the employer to prove that it communicated to the employee the standards under which she would qualify as a regular employee. However, the employer neither presented any evidence to prove this, such as a policy handbook, operations manual, or performance appraisal document. Neither did the employer allege that it informed the employee of the criteria for regularization.
The Supreme Court ruled that the employee was illegally dismissed from employment. While the rule is that the employer bears the burden of proof to prove that the employee’s dismissal was for a just or authorized cause, the employee must first establish by substantial evidence that indeed he or she was dismissed. Here, to prove the fact of her dismissal, the employee alleged that the Operations Manager verbally informed her not to report to work anymore. In support of her allegation, she presented the photocopy of her SMS conversation with her supervisor, wherein the latter explained that it was the company’s managers who decided to terminate her. The Supreme Court accepted this as proof of the employee’s dismissal. Moreover, as the employer did not present a copy of the employee’s resignation letter, or any evidence that she went on AWOL, the Supreme Court did not consider the employer’s allegations of voluntary resignation or abandonment.
The Supreme Court awarded the employee with separation pay in lieu of reinstatement as reinstatement was no longer possible because the employee had already reached the retirement age. The computation of back wages was directed to be from the time of the employee’s illegal dismissal on December 13, 2012, up to the time she reached compulsory retirement age on August 19, 2020.
Read the latest issue of SyCipLaw Employment and Immigration Update here or via this link.
For further information, please contact:
Ronald Mark C. Lleno, Partner, SyCip Salazar Hernandez & Gatmaitan
rmclleno@syciplaw.com
