Sunday, May 4, 2008

Probationary Status and Minimum Wage

Q: An employer is of the position that since an employee was on probationary status, then the salary of the employee for the duration of six-month probationary period cannot be the same as the salary of a regular employee. Is this correct?

A: No. The probationary status of an employee and the wage or salary he is entitled to receive are two entirely distinct and disparate terms in labor law.

The first term is used in reference to security of tenure. A probationary employee is one who has a limited tenure, i.e. six (6) months; but such probationary employee is nevertheless entitled to security of tenure and can only be terminated for a just cause.

On the other hand, the “wage” or “salary” paid to any “employee” refers to the “remuneration or earnings” that are “capable of being expressed in terms of money, for work done or to be done, or for services rendered or to be rendered. Under Art. 97 (c) of the Labor Code, the term “employee” is simply defined as “any individual employed by an employer.”

While there are exceptions to the coverage of the law on minimum wage, these are limited to farm tenancy or leasehold, domestic service and persons working in their respective homes in needle work or in any cottage industry duly registered in accordance with law.

The employer probably had in mind “special workers” covered by “apprenticeship agreements” or “learnership agreements,” and “handicapped workers” who are entitled to wages, albeit lower than the minimum wage.

From Sentricom v. NLRC (CA-G.R. SP NO. 85505, January 25, 2005).

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