Employers Must Clearly Define Performance Standards for Probationary Employees

ORIENT EXPRESS PLACEMENT PHILIPPINES, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION AND ANTONIO F. FLORES, RESPONDENTS. G.R. No. 113713, June 11, 1997

Imagine being hired for a dream job overseas, only to be sent home after a month due to ‘poor performance.’ This is precisely what happened to Antonio F. Flores, a crane operator hired by Orient Express Placement Philippines for a job in Saudi Arabia. But the Supreme Court stepped in to protect Flores, reinforcing a crucial principle: employers must clearly communicate performance standards to probationary employees.

This case underscores the importance of transparency and fairness in probationary employment. It highlights that employers cannot simply terminate a probationary employee without demonstrating that the employee failed to meet pre-defined, reasonable standards communicated at the start of their employment.

The Legal Framework for Probationary Employment

Probationary employment in the Philippines is governed primarily by Article 281 of the Labor Code. This article states that probationary employment serves the purpose of allowing the employer to observe the fitness of a new employee, and conversely, allows the employee to assess the suitability of the work.

Article 281 of the Labor Code states: “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.”

The key phrase here is “reasonable standards made known by the employer to the employee at the time of his engagement.” This means that an employer cannot retroactively create performance standards after an employee has already started working. The standards must be clearly communicated upfront.

For example, imagine a newly hired marketing assistant. The employer must inform them at the beginning that, to pass probation, they must achieve a certain number of leads generated, social media engagement rate, or successful campaign launches. Without these clear benchmarks, a dismissal based on “poor performance” would likely be deemed illegal.

The Case of Antonio Flores: A Closer Look

Antonio F. Flores was hired as a crane operator for a one-year contract in Saudi Arabia. However, upon arrival, he was assigned as a floorman instead of a crane operator. After just over a month, he was repatriated to the Philippines and told that his performance was unsatisfactory.

Flores filed a complaint with the Philippine Overseas Employment Administration (POEA), arguing that he was illegally terminated. The POEA ruled in his favor, a decision later affirmed by the National Labor Relations Commission (NLRC).

Here’s a breakdown of the key events:

• Hiring: Flores was hired as a crane operator with a defined salary and probationary period.
• Misassignment: Upon arrival, he was assigned as a floorman instead of a crane operator.
• Termination: He was terminated after a little over a month for alleged poor performance.
• Complaint: Flores filed a complaint for illegal termination.
• POEA Decision: The POEA ruled in favor of Flores, finding the dismissal unwarranted.
• NLRC Decision: The NLRC affirmed the POEA’s decision.

The Supreme Court, while acknowledging that Flores did operate a crane at some point, ultimately upheld the NLRC’s decision. The Court emphasized the employer’s failure to establish and communicate clear performance standards.

As the Supreme Court pointed out, “no standard whatsoever by which such probationary period could be hurdled was specified and made known to him. Due process dictates that an employee be apprised beforehand of the condition of his employment and of the terms of advancement therein.“

The Court further stated, “Besides, unsatisfactory performance is not one of the just causes for dismissal under the Labor Code.“

Practical Implications for Employers and Employees

This case serves as a stark reminder to employers about the importance of transparency and fairness in probationary employment. It clarifies that dismissing a probationary employee requires more than just a vague claim of poor performance.

For employees, this case highlights their right to be informed of the standards they must meet to achieve regular employment. It empowers them to challenge dismissals that are not based on clearly defined and communicated criteria.

Key Lessons

• Define Standards Upfront: Employers must clearly define performance standards at the time of engagement.
• Communicate Clearly: These standards must be communicated to the probationary employee.
• Document Everything: Keep records of the communicated standards and any performance evaluations.
• Fair Assessment: Assess the employee’s performance fairly against the defined standards.
• Due Process: Provide the employee with an opportunity to improve their performance.

Consider a hypothetical scenario: A restaurant hires a probationary chef. To comply with this ruling, the restaurant must clearly state the criteria for successful completion of probation (e.g., quality of dishes, speed of preparation, adherence to recipes) from day one. Simply saying “we’ll see if you’re a good fit” is not enough.

Frequently Asked Questions

Q: What happens if an employer doesn’t specify performance standards during probationary employment?

A: If an employer fails to specify performance standards, it becomes difficult to justify a dismissal based on poor performance. The dismissal may be deemed illegal, and the employee may be entitled to compensation.

Q: Can an employer change the performance standards during the probationary period?

A: Generally, no. The performance standards should be established and communicated at the beginning of the probationary period. Changing them mid-probation could be seen as unfair and may not be legally defensible.

Q: What constitutes “reasonable standards”?

A: Reasonable standards are those that are objective, job-related, and consistently applied. They should be directly related to the requirements of the position and not be arbitrary or discriminatory.

Q: What if the employee’s poor performance is due to inadequate training?

A: If the employee’s poor performance is a result of inadequate training or lack of resources, it may be difficult for the employer to justify the dismissal. The employer has a responsibility to provide adequate support for the employee to succeed.

Q: Does this ruling apply to all types of probationary employment?

A: Yes, this principle applies to all types of probationary employment, regardless of the industry or position.

Q: What should an employee do if they believe they were unfairly dismissed during their probationary period?

A: An employee who believes they were unfairly dismissed should consult with a labor lawyer or file a complaint with the Department of Labor and Employment (DOLE).

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