The Supreme Court, in this case, affirmed that an employer can legally terminate a probationary employee who fails to meet reasonable performance standards made known to them at the start of employment. This ruling underscores the importance of clearly communicating job expectations and provides employers with the necessary flexibility to ensure they retain only qualified individuals. For employees, it highlights the need to understand and meet the standards set forth by their employers during the probationary period to secure regular employment.

When ‘Chronic Tardiness’ Derails the Path to Regular Employment

This case revolves around Mylene Carvajal’s complaint against Luzon Development Bank (LDB) for illegal dismissal. Carvajal was hired as a trainee-teller on a six-month probationary contract. During her employment, she incurred numerous instances of tardiness and absences, and her performance was evaluated as unsatisfactory. LDB terminated her employment before the end of the probationary period. The central legal question is whether LDB had the right to terminate Carvajal’s probationary employment based on her performance and attendance.

Carvajal argued that her dismissal was illegal, emphasizing that she should be considered a regular employee because the bank did not properly inform her of the standards for regularization. However, the Supreme Court disagreed, referencing her appointment letter, which explicitly stated that the extension of her contract depended on her job requirements and overall performance. The letter also reserved the bank’s right to terminate the contract for below-satisfactory performance or disregard of company rules.

The court highlighted that probationary employees, while enjoying security of tenure, can be terminated for just or authorized causes, and also for failing to meet reasonable standards for regularization, as stated in Article 281 of the Labor Code. The relevant provision of the Labor Code states:

Art. 281. Probationary Employment. – Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

Building on this principle, the Court found that Carvajal’s “chronic tardiness” was a valid reason for termination. It was viewed as a failure to meet a reasonable standard of employment. The Court emphasized that punctuality is a reasonable expectation for any employee. Even if specific standards weren’t explicitly outlined, adhering to work hours is a basic requirement. Her repeated tardiness, coupled with other infractions like unauthorized absences and unsatisfactory performance, justified the bank’s decision.

Moreover, the court addressed the issue of due process. It clarified that in cases of probationary employment, due process doesn’t necessarily require a hearing for terminations based on failure to meet standards. Rather, due process is satisfied when the employer informs the employee of the reasonable standards expected during the probationary period, citing Philippine Daily Inquirer, Inc. v. Magtibay, Jr.:

Unlike under the first ground for the valid termination of probationary employment which is for just cause, the second ground [failure to qualify in accordance with the standards prescribed by employer] does not require notice and hearing. Due process of law for this second ground consists of making the reasonable standards expected of the employee during his probationary period known to him at the time of his probationary employment.

Here, Carvajal was repeatedly warned about her tardiness and given opportunities to explain her actions. She was also made aware of the bank’s dissatisfaction with her performance through memoranda. This, according to the Court, satisfied the requirements of due process in her case.

This case reinforces the employer’s right to assess and terminate probationary employees who fail to meet reasonable standards communicated at the beginning of employment. It underscores the importance of transparency in setting expectations and consistently communicating those expectations to the employee.

FAQs

What was the key issue in this case?	The key issue was whether the employer, Luzon Development Bank, validly dismissed Mylene Carvajal, a probationary employee, for failing to meet reasonable employment standards. This included chronic tardiness and unsatisfactory performance.
What is probationary employment?	Probationary employment is a trial period, not exceeding six months, during which an employer assesses an employee’s suitability for regular employment based on communicated standards. The employer can terminate the employment if the employee fails to meet these standards.
What are the grounds for terminating a probationary employee?	A probationary employee can be terminated for just or authorized causes, or for failing to qualify as a regular employee based on reasonable standards made known to them at the time of engagement.
What constitutes due process in terminating a probationary employee for failing to meet standards?	Due process in this context primarily involves informing the employee of the reasonable standards expected of them during the probationary period, rather than requiring a full-blown hearing.
What happens if an employer doesn’t inform a probationary employee of the standards for regularization?	If the employer fails to inform the probationary employee of the standards for regularization at the time of engagement, the employee may be deemed a regular employee.
Is habitual tardiness a valid ground for terminating a probationary employee?	Yes, habitual tardiness can be a valid ground for terminating a probationary employee, especially if punctuality is a reasonable standard for the position.
Can an employer terminate a probationary employee before the end of the probationary period?	Yes, an employer can terminate a probationary employee before the end of the probationary period if there is a valid reason, such as failure to meet reasonable standards or just cause.
What is the significance of the employment contract in probationary employment?	The employment contract, particularly the appointment letter, is crucial as it should outline the standards for regularization and reserve the employer’s right to terminate the contract for unsatisfactory performance.

This case highlights the importance of clearly defined expectations and consistent communication in probationary employment. Employers must ensure that employees are aware of the standards they need to meet, while employees must strive to understand and fulfill those standards to secure their position.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: MYLENE CARVAJAL vs. LUZON DEVELOPMENT BANK, G.R. No. 186169, August 01, 2012