“What is Retrenchment? Retrenchment or downsizing is a mode of terminating employment initiated by the employer through no fault of the employee and without prejudice to the latter, resorted to by management during periods of business recession, industrial depression or seasonal fluctuations or during lulls over shortage of materials. It is a reduction in manpower, a measure utilized by an employer to minimize business losses incurred in the operation of its business.
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“Accordingly, the employer may resort to retrenchment in order to avert serious business losses. To justify such retrenchment, the following conditions must be present, namely:
The retrenchment must be reasonably necessary and likely to prevent business losses;
The losses, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or, if only expected, are reasonably imminent;
The expected or actual losses must be proved by sufficient and convincing evidence;
The retrenchment must be in good faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure; and
There must be fair and reasonable criteria m ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.”
Probationary employee enjoys security of tenure. Their employment cannot be terminated on employer’s bare claim that the employee failed to qualify. There are some procedures and parameters that must be considered.
Employers often have mistaken assumption that when they hire an employee on a probationary status such employee may be terminated at will at the end of the probationary period. It must be noted that probationary employees also enjoy security of tenure. Although, the rule in terminating their employment is slightly different as it does not require the application of a two-notice rule, non-regularization of a probationary employee cannot be arbitrarily exercised by the employer.
In a little old case of Abbott Laboratories, Philippines, et. al. vs. Pearlie Ann F. Alcaraz,[1] the Supreme Court laid down some guidelines about a probationary employee.
A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 295 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with the reasonable standards made known by the employer to the employee at the time of the engagement.
The services of an employee who has been engaged on probationary basis may be terminated for any of the following: (a) a just or (b) an authorized cause; and (c) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.
It should be noted however that Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor Code provides that if the employer fails to inform the probationary employee of the reasonable standards upon which the regularization would be based on at the time of the engagement, then the said employee shall be deemed a regular employee. Where no standards are made known to the employee at that time, he shall be deemed a regular employee.
The employer is made to comply with two (2) requirements when dealing with a probationary employee: first, the employer must communicate the regularization standards to the probationary employee; and second, the employer must make such communication at the time of the probationary employee’s engagement. If the employer fails to comply with either, the employee is deemed as a regular and not a probationary employee.
Keeping with these rules, an employer is deemed to have made known the standards that would qualify a probationary employee to be a regular employee when it has exerted reasonable efforts to apprise the employee of what he is expected to do or accomplish during the trial period of probation. This goes without saying that the employee is sufficiently made aware of his probationary status as well as the length of time of the probation. The exception to this is when the job is self-descriptive in nature, for instance, in the case of maids, cooks, drivers, or messengers.
The rule on notifying a probationary employee of the standards of regularization should not be used to exculpate an employee who acts in a manner contrary to basic knowledge and common sense in regard to which there is no need to spell out a policy or standard to be met.
In the same light, an employee’s failure to perform the duties and responsibilities which have been clearly made known to him constitutes a justifiable basis for a probationary employee’s non-regularization.
A different procedure is applied when terminating a probationary employee; the usual two-notice rule does not govern. Employee to meet the standards of the employer in case of probationary employment, it shall be sufficient that a written notice is served the employee, within a reasonable time from the effective date of termination.
