Employment Status and Non-diminution of Salary & Benefits

Maria, a payments processor in Company ABC, a bills collection company requested for a 3-month leave of absence in
order to prepare for her board examinations. Her company approved but to avoid impairing their regular operations
because of her absence, the General Manager of Company ABC asked the HR to source a temporary replacement.

To encourage quick sourcing and entice a large applicant pool, the GM told the HR to offer a salary 50% higher than
the current salary rates of the regular payments processor to the person who will qualify and accept the 3-month
employment period. The GM justified that this is a one-off break of their internal salary equity, whereas itll be very
hard to source applicants due to the Christmas season, when persons exploring short work opportunities will be quite
low.

The HR successfully sourced and offered the temporay position to Orly, a fresh graduate. Orly received a fixed-term
contract of 3 months. On his 2nd month of employment, one payments processor filed her resignation effective
immediately. The GM, decided not to hire for a replacement since Maria will be back in one months time. The GM is
also thinking of offering the fulltime position to Orly after the end of his 3-month contract.

Upon Marias return to work and consequently the end of 3 month contract of Orly, the GM offered a new employment
contract to Orly with the following conditions:

1. He needs to undergo a probationary period of 3 more months as to consider his stint when he was still a fixed-
term employee. This is a trial period if he is fit for regular employment
2. He will be performing the same job responsibilities
3. That his new salary will be based on the official entry rate for payments processor, which is lower than his salary
when he was still a fixed-term employee

The GM explained that his old salary was inflated to hype the 3 month contract only. While he will no longer receive the
same salary that he was enjoying, he will be entitled to other benefits in the future, such us Allowances, Medical & Life
Insurance and a Mobile Plan which is in effect, greater than the value of his old salary. However, he will get to
experience the mentioned benefits only after his confirmation to regular position, which is after 3 months. Orly, having
Company ABC as his 1st employer and wishing for a permanent work did not see anything wrong and accepted the new
employment contract.

1. In the case of Orly, did the GM violate the law on non-diminution of benefits enshrined in Article 100 of the
Philippine Labor Code?
2. Is the GM correct in letting Orly undergo a probationary period? How about qualifying his initial engagement as
fixed-term?
3. In case there were inadequacies in terms of handling Orlys case, what are the applicable remedies that you
can propose if you are the HR Manager?