In Labor Advisory No. 14 dated 30 March 2020, the Department of Labor and Employment (DOLE) declared that “[f]or purposes of determining the six-month probationary period, the one-month ECQ period is not included.” ECQ refers to the Enhanced Community Quarantine, which is distinct and separate from a General Community Quarantine (GCQ).
We start with the premise that a labor advisory is not issued pursuant to the rule-making powers of the DOLE. A labor advisory is, as the name suggests, an opinion or advise issued by the DOLE. It may reflect an existing regulation or policy, but it is not issued pursuant to the rule-making powers of the DOLE. It is entitled to great respect because the DOLE is the government agency with the expertise in labor-related matters. The DOLE enjoys the presumption that its issuances are valid and consistent with applicable laws.
The interpretations or opinions of the DOLE on labor, however, is not conclusive. It is not binding on the Supreme Court, which has declared a number of times that even regulations issued by the DOLE as part of its rule-making powers are contrary to law.
NATURE OF PROBATIONARY EMPLOYMENT
A probationary period is intended to give the employer an opportunity to observe and evaluate if the probationary employee has the desired qualities to be a regular employee. These desired qualities are contained in a set of criteria which must be communicated to the employee at the start of the probationary period.
The usual probationary period is 6 months. The lawmakers deem 6 months as sufficient to give the employer enough opportunity to observe the performance of the employee. If the employer fails to act within the 6-month period, the probationary employee becomes a regular employee by operation of law. In other words, if the employee is allowed to work beyond the 6-month period, even for a single second, the employee is considered a regular employee.
EXTENSION OF PROBATIONARY PERIOD
In certain instances, the 6-month period may be extended by agreement between the employer and the employee. Despite the seemingly mandatory nature of the 6-month maximum probationary period under the Labor Code, the Supreme Court has declared that the employer and employee are not precluded from agreeing on an extension. This is usually done in cases wherein the evaluation is negative and the employer wishes to give the employee another chance to pass the evaluation.
A decision or ruling of the Supreme Court forms part of Philippine laws, at par with the Labor Code and above the issuances of the DOLE. For emphasis, the extension must be done in good faith, with justification, and must be agreed upon by both the employer and employee. The extension cannot be unilateral.
UNILATERAL EXTENSION BY DOLE
Labor Advisory No. 14 gets on top of the mutuality of consent between the employer and employee — it “advises” stakeholders that the one-month ECQ period must not be counted in computing the 6-month probationary period. Labor Advisory No. 14 reads: “For purposes of determining the six-month probationary period, the one-month ECQ period is not included thereof.”
It is a basic principle that the requirements of law are DEEMED incorporated or written in all employment contracts. For this principle to apply, the requirement must be imposed by law or regulations, which may be a Department Order issued by the DOLE pursuant to its rule-making powers.
To illustrate, the DOLE issued Labor Advisory No. 16 on 4 May 2020, covering the interruption of period for filing of applications for Alien Employment Permits (AEPs) and Private Employment Agencies (PEA) licenses. These matters are included in Department Order No. 213 issued on 5 May 2020.
Perhaps the DOLE will issue a D.O. on the extension of probationary employment period, but as of today, we are not aware if such D.O. exists. A Labor Advisory, as noted above, is simply an expression of opinion by the DOLE. While it is not binding on courts, as noted above, it is entitled to great respect.
APPLICATION OF THE ONE-MONTH EXTENSION
Labor Advisory No. 14 basically extends the probationary period for one month. There are reasonable justifications for the extension. The lockdown may be considered a force majeure which affects contractual obligations. While the Bayanihan to Heal as One Act grants a grace period only for rents and loans, it nevertheless illustrates how the State can “force” an extension in private commercial contracts. The law allows the President to “undertake such other measures as may be reasonable and necessary” to carry out the declared national policies. The Secretary of Labor is an alter ego of the President. Still, the extension is better fleshed out in a Department Order, not a mere Labor Advisory.
It is easy to see the practical benefit of the extension on establishments that are forced to stop their operations during the ECQ. During the no-work period, there is simply no basis to evaluate the performance of the probationary employee. This defeats the very purpose of probationary employment. An extension of the probationary period provides the employer with an opportunity to evaluate the actual performance of the employee, and equally provides the employee with a reasonable opportunity to prove that he/she can comply with the criteria of regularization.
The Labor Advisory, however, does not make any distinction. It covers all probationary employees, including the following: (a) those whose employers are allowed to operate; (b) those whose employers are allowed to operate on a limited capacity and the probationary employee is part of the skeleton workforce; and (c) those whose employers are not performing essential services but have alternative work arrangements, including work-from-home. At first glance, it can be argued that the extension should not apply to these situations.
Still, these are extraordinary times. The criteria for regularization, which contemplates normal times, cannot be applied during the ECQ. For instance, a probationary employee may incur absences or tardiness because he/she cannot get through checkpoints. Even for on-site or near-site employees, there are factors which may negatively impact the employees’ performance. For companies with alternative work arrangements, including alternate work days or compressed work-week during the ECQ, problems will arise as to the computation or application of the probationary period. In summary, there are enough reasons to apply the one-month suspension to all probationary employees, without distinction.
What if an employer insists on the original period and, after evaluation, decides not to regularize a probationary employee? The arguments are already presented above. The Labor Advisory is not conclusive on courts, which means that courts will have the final say whether the Labor Advisory is mandatory or, as the name suggests, simply an “advice” or recommendation.
EXTENSION OF ECQ, GCQ
The next issue pertains to the extension of the ECQ. Labor Advisory No. 14 expressly indicates a one-month period. It does not say “until the ECQ is lifted” (other regulations, including the grace period for the payment of rents and loans, extend the effect of the regulation until the lifting of the quarantine period, whether ECQ or GCQ). [See Updated quarantine classifications in all areas]
Whatever the rationale of Labor Advisory No. 14 is/are, the same rationale should equally apply during the 30-day period and any extension of the ECQ. But this is not clear in the advisory and until the DOLE issues a Department Order on the matter, employers and employees must resolve the matter on their own. It can be argued that the rationale for the one-month suspension is to allow stakeholders to adjust to the lockdown, which means that it should not be extended beyond the one-month period. This problem is compounded by the fact that the ECQ period may be converted to GCQ, and vice versa. GCQ is obviously not covered under Labor Advisory No. 14.
A possible remedy may be the execution of an agreement between the employer and employee for the extension of the probationary period. An extension is allowed under certain instances, and given the myriad of challenges caused by the pandemic and the community quarantine, the parties should have enough basis to resort to such extension. An agreement is, of course, mutual. It cannot be imposed unilaterally.
In the absence of such agreement or an issuance from the DOLE, it is not difficult to imagine employers playing safe and limiting the extension to the one-month period provided under Labor Advisory No. 14. After all, if the probationary employee is allowed to work even for a single second beyond the probationary period, he/she becomes a regular employee by operation of law.
LABOR ADVISORY NO. 14-A
Added: The DOLE subsequently issued Labor Advisory No. 14-A, or the Supplemental Guidelines on the Non-Inclusion of the Community Quarantine Period in the Six-Month Probationary Period. It provides: “For purposes of the six-month probationary period, the period during which the enhanced or general community quarantine is enforced where the establishment has temporarily ceased or closed operations and/or the worker was temporarily not required to report for work on account thereof, is not included in the six-month probationary period as required under Article 296 of the Labor Code, as renumbered.” In other words, per the clarification made by the DOLE:
- 1. The Labor Advisory covers both the ECQ and GCQ period.
- 2. The non-inclusion of the quarantine period is applicable when: (i) the establishment has temporarily ceased or closed operations; and/or (ii) the worker was temporarily not required to report for work on account thereof. If employees are made to work (e.g., work-from-home, telecommuting, other alternative work arrangements, etc.), these employees are not covered.
- 3. Extensions of the ECQ or GCQ are covered. Labor Advisory No. 14-A does not specify a period, but simply provides that the non-inclusion is applicable for “the period during which the enhanced or general community quarantine is enforced” (emphasis supplied). In other words, until the ECQ/GCQ is not lifted, and until the employee is not made to work, the running of the 6-month probationary period is effectively suspended.
Added: There are, of course, other issues. For instance, if a business establishment is allowed to operate under the guidelines of the pertinent government agency, but the company opts not to open its business (and employees are not called back for work), is the 6-month probationary period still suspended? In areas where the GCQ classification has been transitioned to MGCQ, is the 6-month probationary period still suspended?
Note: For emphasis, the foregoing is not a legal advice and should not be construed as such. It is for discussion purposes only. Consult your retained lawyer.
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