Employers require newly-hired employees to undergo probationary period so they can evaluate their performance and to test if they can qualify as regular employees. For this purpose, a contract known as probationary employment is signed. Article 281 of the Labor Code provides that “a probationary employment shall not exceed six [6] months from the date the employee started working. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when one fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee”.
The employer can dismiss a probationary employee only for just cause or failure to meet the standards of regularization. The security of tenure is limited to probationary period.
But, what is the legal consequence if the dismissal of probationary employee is illegal? Will his backwages be full [entitling him to get the salaries from the time of dismissal up to actual reinstatement] or be limited to six months’ probation?
Our Honorable Supreme Court ruled the issue in its en banc decision in C.P. Reyes Hospital v. Barbosa, G.R. No. 228357, 16 April 2024, uploaded on 31 July 2024. In this case, Barbosa signed a six-month probationary employment contract from 04 September 2013 to 04 March 2014 during which time she would train as Staff Nurse, then as Ward Head Nurse, and finally as Training Supervisor. C.P. Reyes Hospital terminated Barbosa on 29 November 2013 and sent her a notice citing negative performance feedback on 30 December 2013. She sued for illegal dismissal. The hospital argued that her dismissal is legal because it was made before the expiration of her probationary period of employment due to absenteeism and failure to qualify for regular employment due to negative feedback. The Labor Arbiter ruled that she was illegally dismissed, as it found that Barbosa successfully met C.P. Reyes Hospital’s standards based on numerical passing marks given by her evaluators. The NLRC reversed the Labor Arbiter. The Court of Appeals reinstated the Labor Arbiter’s ruling. The employer appealed and argued that the backwages of a dismissed probationary employee is limited to the unexpired portion of her probationary employment, which is up to 04 March 2014 and not to full backwages, which is only awarded to regular employees.
Our Supreme Court ruled that the ground for dismissal used by C.P. Reyes Hospital is not genuine because the evaluation was made on 10 December 2013, almost two weeks after Barbosa was dismissed on 29 November 2013. The due process standard for terminating regular employees requires the “two-notice rule” [first notice – specifying the grounds for termination and requiring the employee to explain and the second notice – dismissal] equally apply to probationary employees if the termination is for just cause. In this case at bar, only one notice was sent to Barbosa. To reiterate, if the dismissal of probationary employee is for a just cause, employer is required to serve two notices. Her dismissal due to absenteeism was an afterthought. Since her dismissal was defective in procedural and substantive aspect, her reinstatement and payment of backwages in full is in order. To erase jurisprudential conflict, it was explicitly ruled that illegally dismissed probationary employee, like regular employee, is entitled to backwages up to their actual reinstatement. However, if reinstatement is not possible due to strained relations of the employer and employee, the backwages shall be computed from the time compensation was withheld up to the finality of the Decision.
This ruling is more in keeping with the constitutional and statutory guarantees in favor of labor. The Constitution did not distinguish between regular and probationary employees in guaranteeing the right to security of tenure. The Labor Code, as amended by Republic Act No. 6715, made no such distinction in stating that illegally dismissed employee is entitled to “reinstatement and full backwages”. The lapse of the probationary period without regularization does not by itself sever the employment relationship. Without valid basis to dismiss a probationary employee, her employment continues beyond the probationary 6-month period. When a probationary employee is illegally dismissed, she is entitled to work beyond her probationary period and the award of backwages is not limited to the unexpired portion of her 6-month probationary period, but to full backwages.
