Dear Atty. Peachy,

I run a small café in Bulacan, and I recently hired a part-time employee who has been with us for about three months. Unfortunately, I have noticed that she has consistently been late to work and has not been following the procedures we established. I am considering terminating her employment because her underperformance is already affecting our operations. I am also concerned that our other employees may follow her bad example if we tolerate this behavior. However, I am worried about the legal implications of dismissing a probationary employee before the end of the probationary period. What are my rights and responsibilities as an employer in this situation?

Kay

Dear Kay,

As an employer, you are not required to retain a probationary employee whose conduct and performance are already affecting your café’s operations. Management prerogative gives you the right to discipline and even dismiss an employee for lawful causes. However, that prerogative must be exercised within the limits of the Labor Code and applicable jurisprudence.

Since your employee has been with you for only three months, she is presumably still a probationary employee, provided that at the time of hiring you clearly informed her of the reasonable standards she needed to meet to qualify for regular employment. This is critical. If no standards were communicated at the start, she may later claim that she should be considered a regular employee, which would make dismissal more legally complex.

You may dismiss a probationary employee on two general grounds: (1) for a just cause under the Labor Code such as habitual tardiness, gross neglect of duties, or willful disobedience of lawful company rules; or (2) for failure to meet the reasonable standards for regularization that were made known at the time of engagement. Repeated lateness and failure to follow established procedures may fall under these grounds, especially if documented and persistent.

It is important to distinguish between dismissing a probationary employee before the expiration of the probationary period and deciding not to regularize her at the end of that period.

If you dismiss her before the probationary period ends, the action is treated as a termination during employment. In this case, strict compliance with procedural due process is required. You must observe the “two-notice rule”: First, issue a written Notice to Explain specifying the acts complained of (such as dates of tardiness and instances of non-compliance) and give her an opportunity to submit a written explanation. After evaluating her response, you must issue a second written Notice of Decision stating whether you are terminating her employment and the grounds for doing so. This process is mandatory if the dismissal is based on misconduct or performance deficiencies occurring during probation.

On the other hand, if you allow the probationary period to run until its scheduled end and determine that she failed to meet the standards for regular employment, the action is technically a non-regularization rather than a disciplinary dismissal. While this is less punitive in character, it still requires that the standards were clearly communicated at the start and that your evaluation is made in good faith. You must inform her in writing, before the probationary period expires, that she did not meet the standards and that her employment will not be continued. If you fail to notify her before the lapse of the probationary period, she may be deemed a regular employee by operation of law.

You are correct to be concerned about workplace discipline and morale. The law does not compel you to retain an employee whose conduct disrupts operations, but it does require that you act fairly, transparently, and with due process. When exercised properly, your management prerogative is fully protected by law.

Atty. Peachy Selda-Gregorio