A probationary employee is provided for in Article 281 of the Labor Code

of the Philippines:
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.

PROBATIONARY EMPLOYMENT ALLOWS YOU TO ASSESS AN

EMPLOYEE’S FITNESS FOR A JOB
The Supreme Court has elaborated on what it means to be a
probationary employee:
A probationary employee, as understood under Article 282 (now Article
281) of the Labor Code, is one who is on trial by an employer during
which the employer determines whether or not he is qualified for
permanent employment. A probationary appointment is made to afford
the employer an opportunity to observe the fitness of a probationer while
at work, and to ascertain whether he will become a proper and efficient
employee. The word probationary, as used to describe the period of
employment, implies the purpose of the term or period but not its length.
Being in the nature of a trial period the essence of a probationary period
of employment fundamentally lies in the purpose or objective sought to
be attained by both the employer and the employee during said period.
The length of time is immaterial in determining the correlative rights of
both in dealing with each other during said period. While the employer,
as stated earlier, observes the fitness, propriety and efficiency of a
probationer to ascertain whether he is qualified for permanent
employment, the probationer, on the other, seeks to prove to the
employer, that he has the qualifications to meet the reasonable
standards for permanent employment.
It is well settled that the employer has the right or is at liberty to choose
who will be hired and who will be denied employment. In that sense, it is
within the exercise of the right to select his employees that the employer
may set or fix a probationary period within which the latter may test and
observe the conduct of the former before hiring him permanently.[1]

WHAT IS THE CORRECT LEGAL PROCEDURE FOR TERMINATING

A PROBATIONARY EMPLOYEE?
The scenario is of an employee who has not yet been regularized. If,
before the end of the probationary period, the employer determines that
the employee is not qualified for permanent employment, how is his
employment terminated in accordance with legal due process?

You need to discuss with a probationary employee how you will evalute
his work for permanent employment.
The process actually begins early in the employment of the probationary
employee. It begins with informing the new hire of the standards by
which he is to be judged during the probationary period. The Supreme
Court discusses this in Mercado vs. AMA Computer College-Paranaque
City, Inc., G.R. No. 183572, April 13, 2010, 618 SCRA 218:
Labor, for its part, is given the protection during the probationary period
of knowing the company standards the new hires have to meet during
the probationary period, and to be judged on the basis of these
standards, aside from the usual standards applicable to employees after
they achieve permanent status. Under the terms of the Labor Code,
these standards should be made known to the [employees] on
probationary status at the start of their probationary period, or xxx during
which the probationary standards are to be applied. Of critical
importance in invoking a failure to meet the probationary standards, is
that the [employer] should show as a matter of due process how these
standards have been applied. This is effectively the second notice in a
dismissal situation that the law requires as a due process guarantee
supporting the security of tenure provision, and is in furtherance, too, of
the basic rule in employee dismissal that the employer carries the
burden of justifying a dismissal. These rules ensure compliance with the
limited security of tenure guarantee the law extends to probationary
employees.
Whereas a regular employee is typically entitled to the two-notice
requirement[2] for his employment to be terminated due to just cause, the
process is different in the case of a probationary employee dismissed
because of his failure to qualify as a regular employee in accordance
with reasonable standards made known to him at the time of
engagement.

You can dismiss a probationary employee without notice or hearing

because this is a trial period.
In the case of Philippine Daily Inquirer vs. Leon M. Magtibay, Jr., G.R.
No. 164532, July 24, 2007, the Supreme Court ruled that such a
dismissal
… 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. By the very nature of a probationary
employment, the employee knows from the very start that he will be
under close observation and his performance of his assigned duties and
functions would be under continuous scrutiny by his superiors. It is in
apprising him of the standards against which his performance shall be
continuously assessed where due process regarding the second ground
lies, and not in notice and hearing as in the case of the first ground.
Due process for a probationary employee consists in having informed
him of the standards against which his performance will be continuously
assessed during the probationary period.

IF THE WORK OF YOUR PROBATIONARY EMPLOYEE IS FOUND

TO BE UNSATISFACTORY, YOU’LL NEED TO SERVE HIM A
WRITTEN NOTICE.
These work standards should be understood at the time of his
engagement and then, if he fails to meet these standards, a written
notice is served to the him by the employer within a reasonable time
from the effective date of termination.[3]
In all cases of probationary employment, the employer shall make known
to the employee the standards under which he will qualify as a regular
employee at the time of his engagement. Where no standards are made
known to the employee at that time, he shall be deemed a regular
employee.[4]

THE TWO NOTICE RULE DOESN’T APPLY IF A PROBATIONARY

EMPLOYEE IS DISMISSED FOR POOR WORK QUALITY.
This was upheld in Abott Laboratories vs. Alcaraz, G.R. No. 192571,
July 23, 2013:
A different procedure is applied when terminating a probationary
employee; the usual two-notice rule does not govern. Section 2, Rule I,
Book VI of the Implementing Rules of the Labor Code states that “if the
termination is brought about by the x x x failure of an 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.”
While affirming that the two-notice rule does not apply to probationary
employees who are terminated for failure to meet the employer’s
standards, Abott Laboratories also cautions employers to comply with
their own internal procedure in evaluating the performance of a
probationary employee. These policies are often found in the company
handbooks and in office memoranda circulated to the employees. The
reason is that company personnel policies create a contractual obligation
on the part of both the employee and the employer to abide by the
same.
Note that the reason for terminating a probationary employee seems to
make a difference to the Court. The two-notice rule does not apply to
probationary employees terminated because of failure to meet the
reasonable standards made known to them at the time of engagement.
However, it still appears to be a requirement for probationary employees
terminated because of just cause.[5] It is thus important that the grounds
for termination are made clear during the termination, and that
documentation be meticulous throughout the process.

Atty. Francesco C. Britanico

[1] International Catholic Migration Commission v. NLRC, G.R.
No. 72222, January 30, 1989, 169 SCRA 606.
[2] The first written notice should be served on the employee and contain
the specific grounds for termination against him, along with a directive
that the employee is given at least 5 days to submit his written
explanation for why he should not be terminated. The employer should
also set a conference or hearing in which the employee will be given the
opportunity to explain and present evidence on his behalf.
If termination is found justified after these, the employer should serve a
second written notice on employee which shows that all the
circumstances involving the charge against have been considered and
that the grounds have been established to justify the termination of
employment.
[3] Philippine Daily Inquirer vs. Leon M. Magtibay, Jr., G.R. No. 164532,
July 24, 2007
[4] Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A of the
Labor Code cited in Aliling vs. Feliciano, G.R. No. 185829, April 25,
2012
[5] Art. 282. Termination by employer. An employer may terminate an
employment for any of the following [just] causes:
1. Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with
his work;
2. Gross and habitual neglect by the employee of his duties;
3. Fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative;
 4. Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or
his duly authorized representatives; and
5. Other causes analogous to the foregoing.
cf Philippine Daily Inquirer vs. Magtibay, ibid, for termination of a
probationary employee for just cause.