Can the probationary contract be extended?

Weekly Show Episodes Labor Law 12 min read , September 16, 2021
Video

We all know people who seem to have what it takes to make it in their careers. We see their potential, yet somehow they end up failing when put to the test. This situation appears in work situations, especially with probationary employees who fail performance evaluations.

So take this question from Angela R., and she asks us.

"Attorney, if a probationary employee needs more training or evaluation. Can management extend the probationary period?

What needs to be done to do this?" If second chances are important to you, stay tuned as we give you tips on how this works.

This episode is brought to you by "How to Draft a Probationary Contract", an online workshop that teaches owners, managers, and supervisors how to create the most important contract during recruitment. This course covers the main components of the contract, as well as tips and best practices to make your life as a recruiting officer easier. Draft your next probationary contract in minutes. Go to info.legalguide.ph/probationary to learn more.

Welcome to Legal Guide Philippines, where we simplify the law to help you make better choices. I'm Atty. Ramon Ramirez and I am with my partner, Atty. Erwin Zagala. Okay, so today we're talking about giving one more chance. It's like a film. Yes, like a film attorney. Do you still remember it? John Lloyd. And of course, Bea. Hi Bea. Okay, so Atty. Erwin, how does this apply to probationary employees? Okay, so let's start with what the law says.

Default Rules on probationary employment

And of course, since we are talking about probationary employees, let's start off with our favorite law book the Labor Code of the Philippines. Article 296 states, Probationary Employment shall not exceed six months from the date employees started working. So, you have six months that serve as a trial period for the employee.

Test them if they can do the job. Can they perform the responsibilities and duties which are attached to their job description? If he/she failed -- this is THE question. If they failed, it means he/she is not qualified. Correct? Up to the six months? No. Even within the six months. It shows that they are not fit for the work. You can remove him/her as a result of failure to qualify with standards. However, there are situations wherein you see something in the employee. "A diamond in the rough" Yeah.

The employee has potential. So you want to give them another chance, but within the sixth month period, they failed. And this reminds me of a story. Would you like to hear this? Yes. There was one utility worker who was working for a company. So six months -- testing, testing, testing, but when the six-month period was almost over, the performance review revealed that he failed. However, the management saw This kid has potential - hardworking, with a good attitude.

He only needs a little more push. Maybe more training? So what they did, they talked. "Mr. Employee, you actually failed. but we're willing to give you one more chance. Do you want to take this opportunity?" They came to an agreement, "Yes boss, I'm willing." So the probationary employment was extended by three more months. It was signed.

So he/she underwent training Now this is the sad part. At the end of the three-month extension, he failed again. Eventually, the employee was removed because of failure to qualify. Now here's the twist, the employee filed a case. Filed a case? He/she failed still filed a case. He claimed, "We exceeded six months. I am a regular already. When you removed me, I was already a regular employee. So, that is illegal." It's like he betrayed his employer. Yes. The employer has been generous with him, but in the end, the employee used it against them. So that's the argument. I hope you're familiar with that one. Yes, that reminds me of a case called Mariwasa Manufacturing versus Leogardo. Your memory is unbelievable.

Do you still remember that from law school? And the researchers also. Okay, so in the case of Mariwasa Manufacturing versus Leogardo, that's what happened. and I want to point out two things that came from the case. Point number one is when the probationary employment is extended in order to give the employee a chance to improve and further his prospect to demonstrate his fitness for regular employment that is considered an exception to the six-month trial period. So in case, let me simplify it further, if the probationary period is extended to give one more chance for the employee to prove themselves, that is allowed as an exception. Okay.

There are requirements such as discussing it with the employee and getting their consent. So that's point number one. The twist, that involves point number two that I want to make. You see in this case, the worker claimed, "You extended the period so I should be a regular employee already." After the six months? The Supreme Court said this about that argument

"(The extension) is an act of liberality on the part of his employer affording him a second chance to make good after having initially failed to prove his worth as an employee. Such an act cannot now unjustly be turned against the employer's account to compel it to keep on its payroll one who could not perform according to its work standards."

Supreme Court said, "Employee won't make the cut. It's not fair for you to turn the tables and use that against your employer." Employers gave you additional chances, then you are using it against them. The employer cannot be compelled to keep someone who could not perform according to its work standards I think that's right Atty. Erwin. I think so too.

It's fair, thank you Supreme Court. Thank you. So if you want to dig further, I would advise reading that case in its original. You'll learn many things there. Those are the two things that I wanted to highlight from that case.

How to extend the probationary period properly

Now you might be asking "Attorney, we kind of find ourselves in that situation. Do you have any tips for implementing that?" Yes, attorney, what are your tips? Okay, you guys are in luck let's talk about it one by one.

Timing

Okay so, the first tip is, be aware of the timing. okay? If you are going to extend your probationary contract period, don't extend it when it's about to end... For example, it ends tomorrow. You're at the end of six months or even worse, the six-month period is already done, then you extend it from there.

No, no, no, don't do that. But if you're going to have an extension, it has to be somewhere in the middle of the probationary period. Because in this way, you can see it from the records you were analyzing, you were evaluating and then you can see the shortcomings but you want to give one more chance before the end of six months. You should already have decided on the extension.

The earlier, the better for me. Because maybe when you push it at the end it might be misconstrued, and even if it's not your intention, that you are making excuses. Okay, so first, is timing.

Evaluate

The second is - do you have evaluations? Because you are saying that you are failing to qualify how do you prove that? So should there be an example? Could be. There can be evaluations. There can be coaching and counseling memorandums, whatever you do in your company. The important is, the failure to qualify is documented properly so you're covered if you get questioned. Because, how can you prove that he/she will not pass as a regular? You can show the evaluation.

And you may also be asking "Attorney, how many evaluations? One? Two? My answer is, the more the merrier. The more you document the failures, the stronger your position becomes. "The more the many-er, guys."

Discuss

Okay. So this leads me to point number three, which is, you now hold the results, discuss it with the employee. "Mr. or miss employee, hi come here, let's talk. Actually, if you look into the evaluations it seems that you failed. Actually, we can remove you for failure to qualify." So you listen to the employee to what they want to say about that. But most important is you let them know where they stand. But there is a part 2, inform the employee that "... Despite this, the management is seeing something in you, and as a result, the management is willing to give you one more chance but only if you are willing to take that chance."

It looks like you have a quotation for that Atty. Erwin, I think it's better to call it something so that it's easier to remember. Let's call this the "Bea doctrine". This is the management telling the employee that:

"We had you at your worst, but we want you at your best. So don't break our heart."

Yeah. Bea doctrine, remember that. If you forget this I don't know what else to do. Okay, so wait for the employee's answer. Okay.

Request for extension comes from employee

And if they are willing, here's the next step. Here's something that you will not hear from everyone. But this is the best practice, ask the employee to give you a request.

What do you mean? The request for extension should come from the employee. The one more chance? Yes. "So, Mr. Employee, do you want to take the chance?" Yes, sir. "Okay write a request. I would like to request the management to give me one more chance and extend my probationary employment." Signed the employee. Why is it important? What is the logic there? So you can document that the employee is actually cooperating and is giving their consent to this one. Now, once you have this request, now you should make an agreement, like a memo or a contract okay, management and employee agree to extend the probationary period upon the request of the employee. Signed, Management. Signed, employee. Now, legally speaking, what does that tell you? What is happening there? The employee cannot use that against you saying "They just forced me to extend. Actually, they are just making that up, I should be a regular by this time."

No. The documents themselves will be able to prove that we talked and then they agreed. The agreement is very crucial if you read the case. And I think what I love about your advice attorney, is it's really heavy on documentation. Right? Because as we learned in our practice, even when we were law students if it's just verbal, it's very hard to prove. If they turn things around you can't do anything anymore. yes, so having the documents on hand, it's really a great advice telling.

And I think this is a reasonable requirement, that's easy. Okay. So does it end after the document is made and signed?

Monitor

No. Continue monitoring. Remember, that there is a 3 month. Well, not necessarily 3 months. It doesn't have to be three. It doesn't have to be three months when you are going to extend. But for me, don't go beyond. Maybe you'll give them another six months that may be another issue itself. I personally would ask, how long do you really need to evaluate the fitness of an employee Maybe you are just making excuses for not regularizing them if you do that. That you don't want them to be regular employees. That's bad. Don't abuse? Yes.

So for me, a reasonable extension would be one, two months. Three months is kind of cutting it close. It's too long. That's just my opinion, that's not in any policy or rule book, but given the circumstances, continue monitoring within that period and if they pass then, welcome to Regular employment. but, if they really can't pass, don't feel bad because they were given a chance I think that's fair. Okay. Great. Thank you, Attorney Erwin.

Recap

So let's just recap some of the stuff that Attorney Erwin talked about. So what is the default probationary period? It is six months. That's correct. All right. And the next thing is, what's the exception? Of course, the exception is our one more chance. Yeah, so we can extend the six months provided we are giving the employee one more chance. And third, Attorney Erwin discussed the steps or the tips in giving one more chance. So there are several steps. Atty. Erwin, including the "Bea Doctrine". Including the "Bea Doctrine" hopefully you remember that.

Additional Resources

Now, if you need our help in drafting a probationary contract, our course, "How to draft a probationary contract" will be a big help for you. And just go to info.legalguide.ph/probationary For more information.

Next, we'd like to know what's your biggest takeaway from today's video, so please write it down in the comments and let's talk about it. Lastly, if you feel that we earned a good rating, please give us a like and subscribe because it gives us the feedback that we need. And it tells us that we're doing a good job and encourages us to do more videos.

One last thing. I believe that we have a moral obligation to see potential in people and give them a chance to prove themselves. If you see the potential in people, take a chance. Who knows? Once they succeed in proving themselves, you may be getting a loyal team member for life.

So wasn't that simple. Now go make better choices.

Probationary