Last 29 April 2024, the Supreme Court released its decision dated 16 April 2024, ruling that illegally dismissed probationary employees, like regular employees, are entitled to back wages not only until the expired portion of their probationary period but covering the time from when compensation was withheld up to reinstatement.

The case entitled C.P. Reyes Hospital v. Barbosa (G.R. 228357, 16 April 2024) concerns Barbosa who, in September 2023, signed a six-month probationary employment contract with C.P. Reyes Hospital where she would train first as a staff nurse, then as a ward head nurse, and finally as training supervisor.

However, three months after, or on 30 December 2023, the Hospital terminated Barbosa’s probationary employment, citing negative performance feedback. Thus, Barbosa filed a complaint for illegal dismissal against C.P. Reyes Hospital.

The Labor Arbiter ruled that Barbosa was illegally dismissed, finding that the numerical passing marks given by her evaluators showed she successfully met C.P. Reyes Hospital’s standards.

While the NLRC (National Labor Relations Commission) subsequently reversed the LA’s ruling, the Court of Appeals (CA) reinstated the LA’s ruling in favor of Barbosa. This prompted C.P. Reyes Hospital to challenge the CA’s decision before the SC.

In its decision penned by Associate Justice Antonio T. Kho Jr., the Supreme Court en banc denied the Hospital’s petition and ruled that Barbosa was illegally dismissed and was therefore entitled to back wages.

According to the Supreme Court, “probationary employment may be terminated when the employee fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of engagement.”

However, in the instant case, the High Tribunal found Barbosa’s dismissal baseless since she obtained the passing grades needed to meet the standards for regularization based on the probationary employment contract.

Meanwhile, the Court found C.P. Reyes Hospital’s claims of unsatisfactory performance ingenuine as they were issued only two weeks after Barbosa had already been terminated and were not accompanied by a performance evaluation.

As Barbosa was illegally dismissed, she was entitled to reinstatement, full back wages, and other benefits. To determine the amount of back wages due Barbosa, the Supreme Court harmonized conflicting jurisprudence.

The Court clarified that illegally dismissed probationary employees, like regular employees, are entitled to back wages not only until the end of their probationary period but up to their actual reinstatement.

The High Tribunal said that in case reinstatement was no longer feasible, the back wages must be computed from the time compensation was withheld up to the finality of the decision in the illegal dismissal case.

The Court stressed that the right to security of tenure under the Constitution and the Labor Code applies to both regular and probationary employees. It added that the mere lapse of the probationary period without regularization does not in itself sever the employment relationship.

According to the Supreme Court, without any valid grounds to dismiss a probationary employee, there is no basis to terminate the employment. Thus, the Court clarified that the employee is entitled to work even beyond the probationary period.

As Barbosa was illegally dismissed, she was entitled to reinstatement, full back wages, and other benefits. Applying the foregoing, the High Court ruled that with respect to Barbosa’s case, back wages should be computed from 1 January 2024, when compensation was withheld from her, until the finality of the SC decision.