Probation Period in Philippines
Probation Period in Philippines: Employment Rules, Risks & Best Practices
Hire Top Talent Anywhere - No Entity Needed
Build your team in as little as 48 hours—no local company setup needed.
Table of Contents
What Is a Probation Period in Philippines?
A probation period in the Philippines is an evaluation phase where employers assess whether new hires meet the reasonable standards made known at the time of engagement. Under Philippine Labor Code Article 296, probationary employment allows employers to evaluate employee performance, skills, and cultural fit before confirming regular employment status.
During this period, employees have the opportunity to demonstrate their qualifications and suitability for the position. Employers must communicate the standards for regularization clearly and in writing at the start of employment. Failure to inform employees of these standards results in automatic regularization.
The probation period is widely used across industries in the Philippines as a risk management tool. It provides flexibility while ensuring both parties can assess the employment relationship before making a long-term commitment.
Is a Probation Period Mandatory Under Labour Laws in Philippines?
No, probation periods are not mandatory under Philippine labor law. Employers have the discretion to hire employees directly as regular workers without a probationary phase. However, if employers choose to implement probation, they must comply with Article 296 of the Labor Code and clearly define performance standards in writing.
When probation is used, employers must provide written notice of the standards at the time of hiring. These standards must be reasonable, job-related, and achievable within the probation timeframe. If no standards are communicated, the employee is automatically considered regular from day one.
Many Philippine employers utilize probation periods to minimize hiring risks. This practice is particularly common for roles requiring specialized skills or cultural alignment with company values.
How Long Can a Probation Period Last in Philippines?
Under Article 296 of the Philippine Labor Code, the maximum probation period is six months (180 days) from the date of engagement. This limit applies to most employment positions unless a shorter period is specified in the employment contract or company policy. Employers cannot exceed this statutory maximum regardless of industry or job level.
The six-month period includes all days from the start date, not just working days. If the employer does not terminate the probationary employee before the end of six months, the employee automatically becomes regular. This automatic regularization occurs by operation of law.
Different probation lengths may be negotiated for specific circumstances, but they cannot exceed six months. Apprenticeship agreements and learnership programs have separate regulatory frameworks under different laws.
Can the Probation Period Be Extended in Philippines?
No, probation periods generally cannot be extended beyond six months under Philippine labor law. Article 296 sets a strict maximum limit, and any attempt to extend beyond this period is considered a violation. Once six months elapse, the employee automatically attains regular employment status regardless of performance evaluation status.
However, extensions may be valid only if mutually agreed upon in writing before the original probation ends and if justified by extraordinary circumstances such as prolonged medical leave. Even then, the total period including extension cannot exceed what is reasonable and must be supported by legitimate business reasons.
Courts typically view extension attempts unfavorably unless clearly documented and consensual. Employers should complete evaluations within the standard six-month period to avoid legal complications and automatic regularization.
Employment Rights During Probation Period in Philippines
Probationary employees in the Philippines enjoy most of the same rights as regular employees under labor law. They are entitled to minimum wage, overtime pay, rest days, holiday pay, and 13th month pay. Social security contributions (SSS, PhilHealth, and Pag-IBIG) must be remitted from day one of employment.
However, probationary employees may have limited access to certain company-specific benefits like performance bonuses or leave conversion. The key difference lies in job security—probationary employees can be terminated more easily if they fail to meet reasonable standards. They are still protected against illegal dismissal and discrimination.
- Minimum wage and overtime: Full compliance with wage laws required
- Social security: Mandatory SSS, PhilHealth, and Pag-IBIG enrollment
- Holiday and leave pay: Entitled to service incentive leave after one year
- 13th month pay: Pro-rated based on service rendered
- Anti-discrimination protection: Full protection under labor laws
Salary, Payroll, and Benefits During Probation
Probationary employees must receive at least the minimum wage applicable to their region and industry. Employers cannot pay probationers less than regular employees performing the same work under the equal pay for equal work principle. All mandatory wage components including overtime, night shift differential, and holiday pay must be provided.
Payroll processing must include statutory deductions for SSS, PhilHealth, Pag-IBIG, and withholding tax from the first pay period. The 13th month pay is mandatory and must be pro-rated for probationers based on actual months worked. Service incentive leave accrues after completing one year of service.
Company-specific benefits like health insurance, performance bonuses, or stock options may be restricted during probation per company policy. However, all government-mandated benefits and protections apply equally to probationary and regular employees without discrimination.
Termination Rules During Probation Period in Philippines
Employers may terminate probationary employees if they fail to meet reasonable standards communicated at hiring. Termination must occur before the end of the six-month period and must be based on the pre-established performance criteria. The employer bears the burden of proving that standards were communicated and that the employee failed to meet them.
Just cause termination rules apply even during probation for serious misconduct, willful disobedience, or fraud. Due process requirements—notice and hearing—must be observed for just cause dismissals. For failure to qualify terminations, written notice specifying the unmet standards is required, though the full procedural due process may be simplified.
Illegal dismissal claims can arise if termination is arbitrary, discriminatory, or lacks proper documentation. Employers should maintain performance evaluation records, feedback documentation, and evidence of standards communication to defend termination decisions.
Notice Period Requirements During Probation
For termination due to failure to meet probation standards, Philippine law does not mandate a specific advance notice period beyond informing the employee of the decision. However, employers should provide written notice stating the reasons and unmet standards. Best practice suggests providing at least one week’s notice when operationally feasible.
For terminations based on just cause (misconduct, negligence), the standard due process requirements apply: a written notice of charges, opportunity to respond, and notice of decision. The twin notice rule must be followed even during probation for just cause dismissals.
Employees who resign during probation should follow the notice period specified in their contract, typically 30 days. Failure to provide proper resignation notice may result in forfeiture of certain benefits or potential liability for damages.
Can Employees Be Terminated Without Cause During Probation?
No, employers cannot terminate probationary employees without cause in the Philippines. Even during probation, termination must be based on either failure to meet the reasonable standards communicated at hiring or just cause under Article 297 of the Labor Code. At-will termination is not permitted under Philippine employment law.
The employer must prove that performance standards were clearly communicated in writing and that the employee failed to meet them. Arbitrary or capricious termination, discrimination, or termination without documented standards constitutes illegal dismissal. Employees terminated illegally are entitled to reinstatement and back wages.
Employers must maintain comprehensive documentation including the initial communication of standards, performance evaluations, coaching records, and evidence supporting the termination decision. This documentation is critical in defending against illegal dismissal claims before labor tribunals.
Payroll, Taxes, and Compliance During Probation Period in Philippines
Employers must comply fully with payroll tax and statutory contribution requirements from a probationary employee’s first day. This includes withholding income tax using the graduated tax rates under the TRAIN Law and remitting employer and employee shares to SSS, PhilHealth, and Pag-IBIG. Non-compliance results in penalties and interest charges.
Monthly remittance deadlines must be strictly observed: SSS contributions by the last day of the following month, PhilHealth within 30 days, and Pag-IBIG by the 10th of the following month. The 13th month pay must be computed pro-rata for probationers and paid by December 24 each year.
- Income tax: Withhold per BIR graduated rates and issue BIR Form 2316
- SSS contributions: Employee and employer shares based on salary brackets
- PhilHealth: Monthly premium based on basic salary
- Pag-IBIG: Employee and employer contributions per mandated rates
- 13th month pay: Pro-rated mandatory payment by December 24
Common Compliance Risks During Probation Period in Philippines
The most common compliance risk is failing to communicate performance standards in writing at the start of employment, which results in automatic regularization. Employers often overlook this requirement, exposing themselves to illegal dismissal claims. Another frequent issue is exceeding the six-month maximum probation period without confirming or terminating employment.
Underpayment of wages or benefits during probation violates labor standards. Some employers mistakenly believe they can pay probationers less or withhold statutory benefits, leading to DOLE complaints and penalties. Inadequate documentation of performance evaluations and termination reasons also creates significant legal exposure.
- No written standards: Results in automatic regular employment status
- Exceeding six months: Automatic regularization occurs
- Wage violations: Paying below minimum wage or withholding mandatory benefits
- Poor documentation: Insufficient records to defend termination decisions
- Discriminatory practices: Termination based on prohibited grounds
- Missing statutory contributions: Failure to remit SSS, PhilHealth, or Pag-IBIG
Probation Period vs Permanent Employment in Philippines: Key Differences
The primary difference between probationary and regular employment is job security. Probationary employees can be terminated for failing to meet reasonable standards, while regular employees enjoy security of tenure and can only be dismissed for just or authorized causes with full due process. Both categories receive the same statutory benefits and wage protections.
Regular employees have stronger protection against termination and are entitled to separation pay for authorized cause dismissals. They may also have access to company-specific benefits that probationers don’t receive. However, both must be enrolled in social security programs and receive minimum statutory entitlements.
| Aspect | Probationary | Regular/Permanent |
|---|---|---|
| Job Security | Can be terminated for failing standards | Security of tenure; just/authorized cause only |
| Duration | Maximum 6 months | Indefinite |
| Statutory Benefits | Full entitlement | Full entitlement |
| Separation Pay | Not required for standards failure | Required for authorized cause dismissal |
| Due Process | Simplified for standards failure | Full twin-notice requirement |
Managing Probation Periods When Hiring Through Employer of Record (EOR)
An Employer of Record (EOR) manages probation compliance by serving as the legal employer while you direct day-to-day work. The EOR handles employment contracts with proper probation clauses, ensures written communication of performance standards, and manages the six-month timeline to prevent automatic regularization. This significantly reduces compliance risks for foreign companies unfamiliar with Philippine labor law.
EORs maintain compliant payroll systems that process statutory contributions, tax withholding, and 13th month pay from day one. They ensure probationers receive all mandatory benefits and that termination procedures follow Philippine law requirements. The EOR also maintains proper documentation for performance evaluations and termination justifications.
Using an EOR is particularly valuable for companies without a Philippine entity. The EOR assumes legal liability for employment compliance while enabling you to evaluate talent during probation. This arrangement provides flexibility for market testing without establishing a legal presence.
How Asanify Ensures Probation Compliance in Philippines
Asanify, the #1 ranked EOR platform on G2, automates probation compliance through its proprietary technology. The platform generates compliant employment contracts with properly worded probation clauses and automated tracking of the six-month deadline. Real-time alerts prevent automatic regularization by notifying HR teams before probation expiration.
The platform manages payroll with built-in compliance for SSS, PhilHealth, Pag-IBIG, and tax calculations. It auto-computes 13th month pay pro-ration and ensures timely remittances to government agencies. Asanify’s document management system stores performance standards communication, evaluation records, and termination documentation to defend against potential disputes.
Asanify’s local Philippine HR experts provide guidance on termination procedures and performance documentation best practices. The platform’s compliance dashboard gives real-time visibility into probation periods across your workforce, reducing administrative burden while ensuring full adherence to Philippine labor law.
Best Practices for Employers Managing Probation Periods in Philippines
Employers should implement structured onboarding that clearly communicates performance standards in writing on day one. Create documented evaluation frameworks with specific, measurable criteria aligned with job requirements. Schedule regular check-ins at 30, 90, and 150 days to provide feedback and document progress toward standards.
Maintain comprehensive records of all performance discussions, coaching sessions, and evaluation outcomes. Ensure contracts explicitly state the probation period duration and reference the communicated standards. Set internal reminders 30 days before probation expiration to make timely regularization or termination decisions.
- Document standards clearly: Provide written, specific performance criteria at hiring
- Schedule regular evaluations: Conduct formal reviews at key milestones
- Maintain detailed records: Document all feedback and performance issues
- Train managers: Ensure supervisors understand probation requirements and documentation needs
- Set timeline reminders: Track probation end dates to avoid automatic regularization
- Ensure consistent treatment: Apply standards fairly across all probationers
- Seek legal counsel: Consult experts before terminating probationary employees
Your Probation Compliance Guide: Managing Probation Periods in Philippines the Right Way
Successfully managing probation periods in the Philippines requires strict adherence to the Labor Code’s six-month maximum, clear written communication of performance standards, and full compliance with wage and benefit requirements. Employers must treat probationers with the same statutory protections as regular employees while maintaining flexibility to evaluate fit.
The key to compliance is documentation—written standards, regular evaluations, and detailed termination justifications. Failure in any of these areas exposes employers to illegal dismissal claims and automatic regularization. Using structured evaluation frameworks and maintaining timeline awareness prevents costly mistakes.
For foreign companies or those without dedicated Philippine HR expertise, partnering with an EOR like Asanify eliminates compliance risks. The combination of technology automation and local expertise ensures probation periods serve their intended purpose while maintaining full legal compliance throughout the employment relationship.
Frequently Asked Questions About Probation Period in Philippines
What is the probation period in Philippines?
The probation period in the Philippines is a maximum six-month evaluation phase where employers assess whether new hires meet reasonable performance standards communicated at hiring. It is governed by Article 296 of the Labor Code and allows employers to evaluate employee suitability before granting regular employment status.
Is probation period mandatory under labour laws in Philippines?
No, probation periods are not mandatory in the Philippines. Employers can hire workers directly as regular employees. However, if probation is used, employers must comply with Labor Code requirements including written communication of performance standards and the six-month maximum duration.
What is the maximum probation period allowed in Philippines?
The maximum probation period in the Philippines is six months (180 days) from the date of engagement. This limit is set by Article 296 of the Labor Code and cannot be exceeded. If the employee is not terminated before six months expire, they automatically become regular employees.
Can an employee be terminated during probation in Philippines?
Yes, probationary employees can be terminated if they fail to meet the reasonable standards communicated at hiring. Termination must occur within six months and be properly documented. Arbitrary termination without basis constitutes illegal dismissal and exposes employers to labor claims.
What is the notice period during probation in Philippines?
Philippine law does not mandate a specific advance notice period for probation terminations due to failure to meet standards. However, written notice explaining the decision is required. For just cause terminations, the twin-notice rule applies even during probation.
Are employees entitled to benefits during probation in Philippines?
Yes, probationary employees are entitled to all statutory benefits including minimum wage, overtime pay, holiday pay, 13th month pay, and social security enrollment (SSS, PhilHealth, Pag-IBIG). They receive the same government-mandated protections as regular employees, though some company-specific benefits may be limited.
How does payroll work during probation period in Philippines?
Payroll during probation must include full statutory compliance: income tax withholding, SSS, PhilHealth, and Pag-IBIG contributions from day one. Probationers must receive at least minimum wage, overtime pay, and pro-rated 13th month pay. All remittances to government agencies must follow standard deadlines.
How does Employer of Record help manage probation compliance in Philippines?
An EOR manages all probation compliance by serving as the legal employer, ensuring compliant contracts with proper probation clauses, tracking six-month deadlines, processing compliant payroll with statutory contributions, and maintaining documentation. This reduces legal risks for foreign companies unfamiliar with Philippine labor law.