The realisation that you may have made a bad hire is an unsettling one.
Maybe the individual is turning out to be very different to how they came across in their interview. Or perhaps they professed to have more skills and experience than is proving to be the case.
It might be that they’re turning out not to be very capable in the role, or that they’re not quite right for your organisation – especially crucial if you’re a small business and everyone needs to be able to work well together.
This is where probation periods (or probationary periods) can help.
But what are they? How do you use them correctly? And how can you make the most of them as an employer?
What is a probation period?
A probation period is the period of time at the start of an employment when an employee may be dismissed with little or no notice if they’re found to be unsuitable for the role.
It’s very normal to include probation periods – typically three months in length – within any new employment contract.
In this guide to the probation period we’ll cover:
- Why probation periods are important
- What the law says about probation periods
- How to implement a probation period
- Example probation period clause for employment contracts
- Managing employees on probation
- Employee rights during the probation period
- Giving notice during a probation period
- Dismissing an employee during the probationary period
- Probation review meetings
- Extending the probation period
Why are probationary periods important?
Probation periods are important as they help employers to be sure they’ve made the right recruiting decision, and to take action more quickly if they feel a new starter isn’t suitable for the role.
This reduces the expense of continuing to employ someone who is unsuitable for the job and enables them to be replaced more swiftly.
Probation periods and UK employment law
Probation periods aren’t covered by any specific employment law.
However, if you include the terms of a probation period in your contract of employment, it will become binding.
It’s also important to remember to observe the Equality Act 2010 during the probation period, and ensure that the reasons for a dismissal, even during the probation period, are not discriminatory.
As with any dismissal, you will need to make sure you have documented evidence that demonstrates that your reasons for dismissal are non-discriminatory.
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Implementing a probation period
As there are no legal requirements around probation periods, if you wish to use one, you will need to write a clause into your employment contracts defining your terms around probation periods, so that they become contractually binding.
This clause should state:
- how long your probation period is
- any terms surrounding notice periods
- your discretionary right to extend the probation period
It’s most common for probation periods to last for 3 months, although occasionally businesses may choose to make them 6 months or sometimes even longer.
How long you choose to make your probation period depends on:
- the nature of the role,
- how long you feel it might take for an employee to grasp the main responsibilities,
- how long you think you might need to make a judgement on whether they are suitable for the role.
Example probation period clause for employment contracts
An example clause setting out the terms of your probation period in an employment contact might look like:
“The first [three] months of your employment shall be a probationary period and your employment may be terminated during this period at any time without notice during your first month, and with one week’s prior notice thereafter.
“We may, at our discretion, extend this period for a further [three] months.
“During this probationary period your performance and suitability for continued employment will be monitored.”
This reflects the minimum notice required.
Managing employees during their probation
Without good management and the right support, even the best people can struggle, so it’s important to take steps to help you to get the best possible sense of the person’s ability.
- Use a well thought out induction plan
The better your induction, the faster a new employee will get up to speed with your organisation’s processes and goals, as well as behavioural norms within the company.
- Be clear on your expectations
Outline your expectations of the employee early on, so they understand what’s required of them.
- Set simple targets
Setting targets will provide you with something to measure performance against.
Make sure these targets are achievable, though. Don’t forget that the employee will need time to get to grips with the way your business operates.
- Reflect on the employee’s performance weekly and take notes
It’s helpful to reflect on how the employee has performed each week, especially for the first month. Making a note of your thoughts will also provide you with documented evidence of any issues you might notice beginning to appear.
- Meet with the employee regularly
Hold regular catch-ups with your new employee to discuss their progress and ability to meet your expectations. Email a summary of your discussion to the employee after each meeting, to ensure they have the clearest possible understanding of expectations and next steps to take.
- Communicate any concerns early on
Although it can feel difficult, clearly communicate to your employee if they are failing to meet expectations as soon as possible. This way you will be giving them the best possible chance to try and change things if they can.
- Keep notes
It’s important to keep notes on progress and concerns throughout the probation period so that you can evidence any decisions you make during or at the end of the probation period.
Employee rights during the probationary period
Employees on probation don’t have any fewer statutory employment rights than those who have passed probation and are still within their first two years of the job.
This means that they are entitled to the national minimum wage, time off in line with the Working Time Directive, statutory sick pay, family-related leave and statutory notice.
They also hold the right to protection against automatically unfair dismissal and unlawful discrimination. This makes it important to remember than if you are dismissing an employee on probation, you need to have evidence to demonstrate that your reasons for dismissal are fair and non-discriminatory.
Although statutory rights are the same for employees on probation, what employers sometimes choose to do is reserve entitlement to certain (non-statutory) benefits, such as enhanced sick pay, until after the employee has successfully passed their probation period.
Do you have to give notice during the probation period?
During the probation period, both the employer and employee must give notice in line with what was agreed through the employment contract.
This must be no less than the statutory notice period of one week following the first month of employment.
This means you don’t have to give notice during the first month of the probation period, provided your employment contract does not specify anything different.
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Dismissing an employee during the probation period
You can dismiss an employee at any point during their probation period, in line with the clause in your employment contract.
Before dismissing them, though, you should give them a period of time to improve after raising concerns with them.
How long you give them will depend on the severity of their failure to meet expectations and whether there are any signs of, or attempts at, improvement.
If you still decide that the employee isn’t right for the job, you should invite them to a formal probation review meeting.
Holding a probation review meeting
If an employee still does not appear to be right for the job, despite informal discussions where you have raised your concerns and clearly defined your expectations, you should invite them to a probation review meeting to discuss bringing their contract to an end.
Prepare for the meeting by reviewing your notes from your catch-ups with your new employee, and ensure you have clear examples of where they have failed to meet required standards.
Start the meeting by explaining its purpose – to review performance and conduct during the probation period.
Also explain that the employee will be able to respond to what you say.
Provide the employee with clear examples of how they have failed to meet expectations.
Be as specific as possible, contrasting the specifics of their performance against those expected.
Be honest and direct, communicating what you have observed without sounding accusatory.
Encourage the employee to respond to your observations. There may be a valid reason for their difficulties, so keep an open mind.
Adjourn the meeting to allow yourself time to make a considered decision.
You may decide to:
- Extend the probation period, allowing the employee extra time to prove themselves.
- Terminate the employee’s contract.
Extending the probation period
If you decide to extend a probation period, this must be communicated in writing before the end of the probation period.
Clearly document the expectations required of the employee, making sure they understand what they must achieve or demonstrate over the coming weeks.
As before, keep monitoring their performance and providing appropriate support to ensure they have the best chance of success.
It’s not unusual to suddenly see performance improve significantly following a formal review as the employee grasps the seriousness of the situation, so it can be worth providing this final opportunity for them to prove themselves.
Terminating an employee’s contract
When dismissing an employee on their probation, there are two key steps to bear in mind:
Provide the appropriate notice
Make sure you provide the appropriate notice period when dismissing an employee on their probation. You may wish to terminate their employment on the same day as the meeting, in which case you would pay in lieu of their notice period.
This should be in line with the contractual notice period for the probationary period as specified in their employment contract.
As mentioned previously, this contractual notice, even during the probationary period, cannot be below the statutory notice period, which is to provide a minimum of a week’s notice if the employee has worked for more than a month.
Provide an opportunity to appeal
It’s not a legal requirement to provide an opportunity to appeal during the probationary period, although it is recommended as it will highlight any potential claim of discrimination that the employee might be intending to make.
This will hopefully give you the chance to settle any disputes internally and avoid an Employment Tribunal claim.
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What to do when a probation period comes to an end
Although not required legally, it’s a good idea to confirm in writing whether an employee has successfully passed their probation period. It will help to reassure them that they are on the right track, making them feel more settled and content in their new role.
To sum up
When implementing probation periods in your business, the key points to remember are:
- Decide on the terms you feel are most appropriate for an employee’s probation period and write these into your employment contracts.
- Take time to induct the new employee into the organisation and be clear about targets and expectations during the probation period.
- Reflect on the employee’s performance regularly and meet with them to discuss their progress, keeping notes of your discussion and any agreed actions.
- Raise any concerns you have about the employee’s suitability for the role early, so that they can be addressed, and the employee receives an opportunity to improve.
- If you’re still unsure about an employee’s suitability as the end of their probation period approaches you may extend it. You must do this in writing before the original probation period ends.
- If you feel you need to terminate the contract, you should hold a formal probation review meeting to discuss this with the employee, giving them the opportunity to make the case for retaining the job.
- If you do dismiss the employee, you must observe the probationary notice period outlined in your contract.
- If an employee successfully completes their probation period, it’s good practice to notify them of this in writing.
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The content of this blog is for general information only. Please don’t rely on it as legal or other professional advice as that is not what we intend. You can find more detail on this in our Terms of Website Use. If you require professional advice, please get in touch.
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8th Jun 2015