Using Probationary Periods Effectively
- Employment Law
- 24th Aug 2022
It is estimated that around 1 in 5 new recruits fail probationary periods, with the most common reasons being poor performance and poor attendance. Conversely, many employers will have experienced employees who perform well during their probationary periods but subsequently underperform after passing probationary periods. To assist employers in using probationary periods more effectively, we […]
By Julie SabbaMLP Law
It is estimated that around 1 in 5 new recruits fail probationary periods, with the most common reasons being poor performance and poor attendance. Conversely, many employers will have experienced employees who perform well during their probationary periods but subsequently underperform after passing probationary periods.
To assist employers in using probationary periods more effectively, we have put together answers to a series of frequently asked questions:
What is a probationary period?
It is a period, usually at the start of an employee’s employment or on promotion to a new role, during which the employee’s performance, conduct and suitability for the role is assessed by the employer.
During the probationary period, it is normal for an employer to reserve a contractual right to dismiss the employee on very short notice, usually 1 week (subject to statutory notice obligations). The notice period will typically increase after successful completion of the probationary period.
It is also common for employees to be required to successfully complete their probation before being entitled to certain contractual benefits, such as company sick pay.
How long should probationary periods last?
Typically, they last 3 or 6 months, although the actual period depends on the nature of the role and the time it would take an employer to properly assess the employee’s suitability.
Who should probationary periods be used for?
Except for very short fixed term contracts (where their use would be impractical), we recommend that probationary periods are used for all new employees.
It may also be appropriate to use probationary periods when promoting employees to more senior roles within the business. This can help manage the process of assigning greater responsibilities to the promoted employee and creating expectations for how failure to meet the standards required in the new role will be handled.
How is a probationary period introduced and relied upon in practice?
There should be very clear clauses in the employee’s contract of employment setting out how the probationary period will operate and how long it will last.
The employer should ensure from the outset that the employee is aware that their suitability for employment will be monitored throughout the probationary period, after which it will be assessed to determine whether their appointment should be made permanent.
Employers should also ensure that they do actually monitor the employee’s performance during the probationary period itself and that they don’t simply wait until the end of the period. Ideally, employers should meet with the employee regularly during the process to provide feedback on whether or not expectations are being met.
Employers should also ensure that they make a formal assessment of the employee’s suitability for permanent employment before the end of the probationary period, rather than allowing the period to pass. This is because allowing the probationary period to expire without assessment may result in the employee successfully completing their probationary period by default.
Can the probationary period be extended?
Yes, provided the employer has included within the employment contract a specific right to do so. Typically, extension will be for a further period of 3 or 6 months.
If a right to extend is relied upon, the employer should make sure that the employee is made aware of the reason for the extension and what they need to achieve or improve in order to pass their probation. The employer should then return to the process of monitoring the employee’s performance during the extended probationary period in the usual way.
Any extension must be confirmed to the employee before expiry of the initial probationary period. Again, this is to avoid the risk of the employee passing their probationary period by default.
What if an employee is absent during their probationary period?
Provided the employer is satisfied that the absences are not related to an employee’s disability or maternity, a poor attendance record during the probationary period is likely to be good grounds for concluding that an employee has failed to pass their probationary period.
However, where the absences are caused by maternity or disability, it may be discriminatory to terminate an employee’s employment when they have not been given a full opportunity to prove themselves during the probationary period. In such circumstances, employers should instead exercise their contractual right to extend the period or agree with the employee for a further period of assessment before making any decision on suitability for employment.
How can an employer dismiss an employee for failing their probationary period?
In most cases, new employees who have failed to pass their probationary periods will not have accrued sufficient service to enable them to bring an unfair dismissal claim. In such circumstances, employers will have relative flexibility in the process they follow. However, we would recommend that employers follow best practice and meet with the employee to explain the decision which has been taken. The decision should then be followed up in writing.
The employee should also be paid their contractual notice entitlement, which will usually be 1 week during the probationary period.
Longer serving employees, who were subject to a probationary period following a promotion, may have attained the right to bring an unfair dismissal claim. An employer would therefore be required to follow the ACAS Code of Practice on Disciplinary and Grievance Procedure and any dismissal would be subject to the usual requirements of a fair dismissal. Such employees would also need to be paid their statutory minimum notice entitlement, which would be calculated by reference to their length of service.
How can I protect my business?
The effective use of probationary periods can protect your business and help it deal with performance concerns relating to a new recruit before they become a problem. However, the important factor is ensuring that probationary periods are appropriately covered in your contracts of employment.
If you would like advice from the Employment Team at MLP Law in respect of any of the issues raised here or more generally, please do not hesitate to get in touch on 0161 524 1965 or email@example.com, or follow us on Twitter @HRHeroUK
About the expert
Stephen is the Owner of MLP Law and leads our Commercial, IP and Dispute Resolution teams which provide advice on all aspects of the law relating to mergers, acquisitions, financing, re-structuring, complex commercial contracts, standard trading terms, share options, shareholder and partnership agreements, commercial dispute resolution, joint venture and partnering arrangements, IT and Technology law, Intellectual Property, EU and competition law, Brexit and GDPR.
Interested in working with Stephen?
Let’s start by getting to know you and your business - either on the phone or in person. Complete the form below and we’ll be in touch shortly.