Probationary periods: what HR needs to know

This article first appeared on the People Management website.

A probation period is how many people begin a new role with a new employer. It means employers can assess a new employee’s suitability for a role and provides them with the opportunity to terminate the employee’s contract if they do not possess the required skills or capability, as determined against a certain skillset or list of identifiable goals for that particular role.

The length of a probation period is determined on a case-by-case basis and is likely to depend upon the nature of the job and how long it will take the employer to assess performance for the purposes of confirming continued employment. For example, a highly skilled role may require a longer probation period so the employer can determine the employee’s suitability for the role given the higher skillset likely to be required. It is not unusual to see probationary periods of three or six months.

The probation period can work for both parties. An employee can try out the new job before deciding it is for them and fully committing to the employer, while it gives the employer the opportunity to assess the suitability of an employee ‘on the job’. It can terminate their employment much easier as notice periods are often much shorter while on probation.

There are often other variations between the contractual terms of employees on probation and those on a full contract. Sickness pay may not be available to those on probation and pension contributions may begin only after the probation period is over. However, as opposed to contractual rights, an employee’s statutory rights (such as national minimum wage) often begin on the first day of employment. 

When managing a probation period it is important to ensure the employee is aware from the outset that a probation period applies to their employment, and that they know the specific goals, attainments and skills that the business will be assessing them against to determine their suitability. In addition, the employee must be made aware of any review meetings that will take place during probation to assess their capabilities and/or development. Records of these meetings should be taken and kept on the employee’s file.

It is also important that guidance and feedback is communicated to the employee, ideally regularly. Employers need to ensure they do not wait until the end of the probationary period to identify or try to address any underperformance or lack of capability. In particular, the outcome of the period should be given to the employee in good time to prevent them successfully completing their probationary period by default – simply because the stated period has ended and has not been noticed or addressed by the employer.

Extending a probationary period can only be done if a contract of employment expressly gives the employer the right to do this or by agreement with the employee. In addition, even where an employment contract does provide for a period to be extended, case law has suggested that this should only be for a reasonable time to allow the employer to provide some indication as to whether it has been completed successfully.

In extending the period, the employer should inform the employee of the reasons for the extension and what improvements can be made and any further goals they are expected to achieve before they can be confirmed in the post. Communication is always key in these types of scenarios. The employee must also be informed of the new date their probationary period is now expected to end. 

If the business does not have a contractual right to extend the probationary period, it can ask the employee to agree to a variation of contract to allow for an extension. Employees may be willing to accept this if their contract will be terminated otherwise.

A probation period is not a legal requirement so does not have to be offered and should not be expected. However, if a probation period is written into a contract, then it is legally binding and breaking these terms will, often, mean the job offer will be retracted.

Probation periods are recommended as it means both employers and employees can be sure they have made the correct recruitment decisions. However, employers must at all times consider the possible legal implications of probation periods and manage them correctly in each given circumstance.

Caitlin Humble is a trainee solicitor in the employment department at Lupton Fawcett