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).

Can I extend a probationary period?

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 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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