Probationary periods

New employees will normally be given a probation period to work through before they are fully integrated into a company. But employers need to ensure they correctly set out their probationary periods and properly manage them.

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What is a probationary period?

Probationary periods are primarily designed to test out whether new employees are a good fit for the business and allow both employer and employee to “dip their toes in the water” at the start of an employment relationship. Other than providing a useful framework for both parties to decide on a longer term commitment, the most practical application of a probationary period is to reduce the standard company notice period (usually one month) to the statutory minimum (one week for new employees). Probationary periods generally last for three months, although they can be shorter - and they can also be extended.

How should employers set out probationary periods?

Probationary periods are normally included as a clause in the main employment contract. This clause should clearly set out the terms of the probation period including:

  • How long it lasts;
  • The notice period that will apply for the duration of the probation period (this must be at least the statutory minimum of one week for new employees); and
  • The method of assessing whether a new employee has passed or failed their probation period (eg. holding a performance review meeting).

As well as including a probation period clause, it is important to ensure that new recruits are fully aware of this clause and understand its implications.

How should a probationary period be managed?

Employees should be informed of how their probationary period will be managed and assessed. The most important criteria for determining the success of a probation period are usually:

  • Employee performance (eg. in terms of achieving goals or standards);
  • Behaviour and conduct; and
  • Capability and demonstration of skills or experience.

The line manager will normally be responsible for monitoring the progress of a new employee during this period. A performance review meeting should be arranged before the end of the probationary period to assess if they passed, failed or if it is necessary to extend the probation period.

How do I dismiss an employee during the probationary period?

Although it is possible to exempt employees on their probationary period from being afforded the full protection of a company dismissal procedure, it is vital that their dismissal is nevertheless dealt with fairly and reasonably, and it is advisable to still go through the standard disciplinary procedure. Fair procedure could include holding a final formal meeting at the end of a series of informal chats. Doing so will ensure that there is a paper trail setting out your motivation for terminating the employment and this will assist you in demonstrating the real reason for the dismissal if the matter were to be challenged. Note that employees on probationary periods can claim automatic unfair dismissal (eg. if they have suffered any unlawful discrimination etc).

How long should a probation period be?

There is no law determining the length of a probationary period. However, there is an expectation that the employer will be reasonable. It is typical for a probationary period to last no longer than six months, and three months where an employee is moving to a new post internally.

Can I extend a probationary period?

If the employment contract allows for it, probation periods can be extended upon review of the employee's performance and suitability. It may be necessary on occasion to extend a probationary period, to allow managers to fully assess the performance of new recruits - for example if they have been absent during the initial period due to sickness or maternity leave. The clause should explicitly allow for an extension of the probationary period and any extension should be given in writing, specifying why it was not possible to assess the employee during the initial period, setting out any issues that the employee needs to address and stating a revised end date.

How do I extend a probation period?

The purpose of extending a probationary period is to allow the employee further time to improve their performance in order to demonstrate competence in the full range of duties and required behaviours.

If an employee's performance during their probation is unsatisfactory in some areas but the managers feel that further training and support may bring the employee up to the required standard, an extension (on a month-by-month basis) can be considered.

An extension should normally be granted only where there are special circumstances justifying such a course and can only be made before the end of the original probationary period.

Extensions are normally granted for a maximum of two further months, to cumulate in a maximum of eight months' probation.

Where it is agreed that employee's period of probation will be extended, it is important for the manager to set out the terms of extension in writing. You can use a Probation letter for this. It is important to state clearly:

  • the length of the extension and the date on which the extended period will end
  • the reason for the extension – for example that the employee's performance has fallen short of certain standards, but that the manager reasonably believes that an extension of time will be effective in allowing the employee to achieve these standards
  • the performance standards or objective that the employee is required to achieve by the end of the extended period of probation
  • any support such as further training that will be provided during the extension
  • that if the employee does not meet fully the required standards, by the end of the extended period of probation, his/her employment will be terminated

It is not advisable to make extending probationary periods the norm. An extension should be agreed only if there are special factors that justify it.

How do I pass an employee's probation?

Once the performance review has been held and a decision has been made to retain the employee, written confirmation that they have passed their performance period should be given to the employee. The probationary period clause in an employment contract should explicitly state that a new employee will not be deemed to have passed their probation period until they receive this written confirmation.

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