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Probationary periods

This is a cross-posted article, originally written on the Pure Employment Law Website and has now been posted here. Please note the date on which this article was posted originally and that any information within may have changed. 

29th May 2014

We could not help but notice the statistic from a recent study that 1 in 5 employees fail to get past their probationary period. This seems like quite a high number! The study found that poor performance and absence were the most common reasons for a failure to pass.

Although it is not a legal requirement to use probationary periods, which are usually around 3 to 6 months, we strongly recommend doing so. Employees on probation do not have enough service to be able to bring a claim for unfair dismissal (which is 103 weeks’ for employees who started on or after 6 April 2012), but they could potentially bring claims for discrimination, whistleblowing and automatic unfair dismissal* in which case the evidence as to what happened during the probationary period may be significant.

The first and most obvious benefit of a probationary period is that it encourages both employer and employee to review and assess whether things are going smoothly. Usually, employers will have one or two review meetings with a new employee during the probationary period which is a good opportunity to ensure they are OK and help settle them in. One small point here, do ensure those review meetings happen and that an employee is told if they have passed their probationary period – often this is forgotten!

The second benefit for an employer is that different contractual terms could be applied during the probationary period, such as allowing for a lesser notice period by either side during the probationary period, or only paying Statutory Sick Pay for any illness absence during the probationary period with a higher rate of company sick pay being payable after successful completion of the probation. Of course, such terms would need to be set out in a contract of employment at the outset of the employment relationship.

As always, there are things that can go wrong. The study mentions that absence can be a common reason for failure. Employers can take a strong view on absence during a probationary period, as they want new employees to seek to impress. However, employers should be careful not to have knee-jerk reactions about sickness absence, especially if it is clear there was a genuine sickness (e.g. a stomach bug) which sometimes, is just life! Caution should also be exercised if absence is linked to a potential disability as the employee may then be able to bring a claim of disability discrimination if they are dismissed during the probationary period. If there is a clear pattern of absence, such as a new employee calling in sick a few times on a Friday, then it can be possible to dismiss during the probationary period.

Poor performance can be more straightforward, but obviously it is best not to spring this on the employee at the end of the probationary period. If there are issues during the probationary period, address these as soon as possible with the employee. If the employee is then dismissed at the end of the probationary period because they have failed to pass, it should not be a surprise to them. If it is a surprise, this can lead to employees questioning whether there is an ulterior motive i.e. potential discrimination.

Usually employers pay the employee for their notice period if they are dismissed during their probationary period. This is why it can be beneficial to apply a lesser notice period during probation. Whilst it may not be necessary to follow a full disciplinary/performance management procedure given that the employee will not have obtained the right to claim unfair dismissal, it is sometimes helpful to explain the reasons why an employee has failed the probationary period to draw away any inference that it is related to a reason which could give rise to claims for discrimination or automatic unfair dismissal. If there is any doubt about a particular situation, we would urge you to seek advice.

* Automatic unfair dismissal is where a dismissal is for reasons connected with pregnancy, childbirth, statutory leave (e.g maternity), for a health and safety reason, a shop or betting worker for refusing to work on a Sunday, for a reason connected with rights under the Working Time Regulations 1998, for performing functions as an occupational pensions trustee, for performing functions as an employee representative or on a European Works Council, for asserting a statutory right, in connection with an application for flexible working, related to the National Minimum Wage, for enforcing rights in relation to working tax credit, in connection with a prohibited list (blacklisting), in connection with time off for study and training request rights, in connection with carrying out jury service, related to status as a part-time worker or fixed-term employee, for trade union membership or non-membership, or participation in trade union activities, in connection with exercising the right to be accompanied to a disciplinary or grievance hearing, for taking part in protected industrial action, in connection with exercising prescribed rights as an agency worker, and in connection with pensions auto-enrolment.