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Top tips for Probationary Periods
Adrian Fryer
A probationary period is a trial phase at the start of a new employment relationship, during which both the employer and the employee assess the suitability of the role. They are usually three to six months in duration. They are a useful tool for employers if used effectively. Here are our top tips:
- An effective probationary period needs an effective probationary period clause
Probationary periods don’t exist as a stand-alone legal concept. They only exist if they are included in the employment contract. Employers wishing to utilise a probationary period should consider including the following in any express contractual clause:
- A statement of the length of the probationary period.
- A mechanism allowing the employer to extend the probationary period with a clear process for how this will be communicated.
- A shorter notice period to be applicable during the probationary period – to minimise the financial outlay for the business if things don’t work out.
- A statement that the business’s full disciplinary and performance management processes will not apply during any probationary period.
- A probationary period cannot be used to delay compliance with legal requirements
Employees have protection from discrimination from day one of employment. They also have the right to receive a statement of terms and conditions, to receive sick pay, and to accrue annual leave. The probationary clause cannot be used to contract out of any of these rights.
- No ordinary unfair dismissal risk provided that probationary period is less than two years
As the law currently stands, employees do not accrue ordinary unfair dismissal rights until they have been employed for two years. This significantly reduces the risk of a fast-tracked probationary dismissal (and is the reason why many employers follow a limited formal process for such dismissals). However, discrimination claims are still possible, as are most claims for automatic unfair dismissal if the employee alleges that their probationary dismissal was for an automatically unfair reason (for example, whistleblowing or health and safety). Employers should check whether any of these risks are ‘in play’ before progressing a failure of probation dismissal.
- The importance of following through on probationary period terms
If an employer has gone to the trouble of including a probationary period clause in the contract, it is important that it is actually followed. If a shorter notice period applies during the probationary period, make sure that a decision is taken to dismiss before the period elapses. In Przybylska v Modus Telecom Ltd, the employer had a probationary clause allowing for dismissal with one week’s notice in the probationary period, rising to three months after that. The employer gave one week’s notice a few days after the probationary period had elapsed. This was wrong and the employer had to pay the full three-month notice period.
You can, however, guard against this risk by including contractual wording that probation continues until you confirm in writing that the employee has successfully completed it.