Business Law & Compliance

What SME employers need to know about probationary periods

7 min read

07 April 2017

After a lengthy recruitment process, you've hired the candidate you thought fit best. But you can't always tell whether you made the right choice until they actually start the job, which is why probationary periods can be a boss' best friend.

Technically, probationary periods aren’t a legal requirement. It’s contractual, a nifty clause affording you time to determine whether or not you made a mistake. But, of course, leaving out certain details could land you in hot water.

It’s in your best interest to imbed probationary periods in your employment contracts. As explained by Michelle Last, a consultant solicitor at Keystone Law: “Employers often do not get the ‘full picture’ until the interview veneer has worn off. Some 81 per cent of individuals lie in an interview – the FSB also found one in five bosses discovered fraudulent references.”

Those are shocking statistics, adding reason to why so many choose to forgo the more traditional, and often costly, means of terminating an unsuitable employee. As a clause in a contract, however, it means alerting staff to its existence and doing some impeccable writing.

What needs to be covered in the employment contract

Firstly, while legal rules for probationary periods don’t exist, there is what you’d call “the norm”. The best example of this is the amount of time you allot it. Typically, bosses rely on a three to six month scale to asses competence. But there is no real requirement to stick to, and junior jobs may need a shorter time span in comparison to senior positions. You may also wish for someone newly promoted to go through a similar period.

This is why consistency is key. Decide what format your probationary periods will take for whatever roles and stick to it come what may. Ensure more information about it sits firmly in a clause in their employment contract – that part is a must-have. It’s not the only thing we’d recommend you add to the clause though – think of the following as insurances, if you like.

We’re talking about the smaller details that could prevent sticky situations – like how the probationary period should be stipulated in your letter of offer when it comes to promotions. It helps to express how long they’ll be on trial and whether they return to their previous role if they fail to meet the requirements. It’s crucial to get the writing for promotions right because they could prove deadly later on.

On a more general note, don’t forget to mention you’ll be monitoring their performance. And what are the standards of conduct you wish them to abide by? State that failure to achieve those standards could lead to dismissal at any time throughout the process – yes, you can do that (we’ll go into more detail on it in a bit).

What’s more, keep in mind they are under your employ since the exchange of the contract – not after the end of the probationary period. They’re thus entitled to family-related leave and pay, and you’re still obliged to listen to their grievances and offer them equal opportunities – which means written feedback on how they’re doing during the period.

Just one more note before we move onto dismissal: You really need to put in writing how notification of successful completion will take place – the employee is deemed to have passed automatically otherwise. You’ll find yourself in the same situation if there’s no mention they need to wait for a written statement. And if the new hire fails to make an impression, it is advisable you tell them why – and note somewhere you did so.

The right way to make employees exit the company during probationary periods can be found on the following page.

How to successfully dismiss those on probationary periods – or extend the time slot

Despite their skill set, the new hire doesn’t gel with the team, they’re highly unproductive and don’t share the values you thought made them a great fit. Whatever the reason may be, it’s come to the point where you want to start anew on your search for an employee. The good news is, bosses don’t have to wait until the end of probationary periods to chuck unsuitable staff out the door.

That is, if you mentioned it in the employment contract. It’s one of those insurances we spoke of. Once someone has completed one months’ service they are entitled to a minimum statutory dismissal notice of one week – any other time should be specified in the contract.

It seems easy enough, as Personnel Today’s Clio Springer said: Employees on probation usually have a short length of service and are therefore unable to claim their dismissal was procedurally unfair or unreasonable, for which two years’ service is needed.” 

But it turns out it’s easier to say “things just didn’t worked out” at the end of the period instead of dismissing them prematurely. Why? “Staff do not need a minimum period of service to claim their dismissal was automatically unfair (such as for asserting a statutory right) or that it was based on unlawful discrimination,” Springer explained. “Bosses will want to be able to demonstrate the grounds for such actions were genuine – so carry out proper investigations into their behaviour.”

As for those being promoted internally, well, they could have passed that two year employment mark Springer alluded to – and they have the right to make that direct claim new hires can’t.

But what happens when you just can’t decide within that time period whether they’re the right employee for you? You can extend probationary periods, of course. But you don’t have the ability to click your fingers and extend it just like that. It should have been detailed in a clause. Once the period has ended and there’s no hint of extension in your new hire’s contract, then guess what, they’re officially part of your team and you cannot then compel them to agree to an extension. 

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