A probationary period is a common feature in employment contracts, essentially serving as an initial trial period at the start of employment. During probation, both employer and employee have a chance to assess whether the employee is suitable for the role and the organization. Here’s what you should know about probation periods and best practices for using them:
- Typical Length and Terms: A probation period is often 3 months or 6 months long, though it can be shorter or something in between (say, 4 months). Some employers opt for 3 months with a possibility to extend to 6 months if they feel more time is needed to evaluate the employee. The employment contract should clearly state the length of the probation and any conditions related to it. For example: “Your first six months of employment will be a probationary period. The Company may extend this period by up to a further 3 months if it deems appropriate.” You should also outline what happens at the end: typically, successful completion leads to confirmation in the role.
- Purpose of Probation: During probation, you will be closely observing the employee’s performance, conduct, attendance, and general fit with the team. It’s a time to provide training and support, but also to address any issues early on. If the employee isn’t meeting expectations, the probationary period framework allows a somewhat simpler path to end the employment than for a confirmed (post-probation) employee. That said, it’s not a free-for-all for unfair treatment – you should still act reasonably and in good faith (for example, giving feedback or warnings if things aren’t going well).
- Notice Period During Probation: One key contractual difference is often a shorter notice period during probation. While a confirmed employee might have, say, one month’s notice for termination or resignation, during probation you might set it at the statutory minimum or a week. For instance, “During your probation, either you or the Company may terminate employment with one week’s notice”. This gives flexibility to let someone go quickly if it’s clearly not working out, without being locked into a long notice. Remember, statutory minimum notice for an employee with less than 2 years’ service is one week (after one month’s employment), so don’t go below that. Many companies simply use one week for up to 6 months service.
- Reduced Benefits: Some companies tie certain benefits to successful completion of probation. For example, you might state that eligibility for private health insurance or enhanced sick pay begins after probation, not immediately. This can save cost on someone who might not stay. However, be careful: statutory benefits (like statutory sick pay or holiday accrual) must still be given from day one regardless of probation. So this only applies to extra discretionary benefits. If you’re doing this, make it clear in the contract or offer letter which benefits kick in later.
- Assessment and Feedback: It’s good practice to have one or more review meetings during the probation. Perhaps at midway and at the end, or more frequently if needed. Provide constructive feedback – let the employee know what they’re doing well and where they need improvement. If there are serious issues, don’t wait until the end of probation to address them; raise them early so the employee has a chance to improve. Keep written notes of these reviews.
- End of Probation – Outcomes: Near the end of the probation period, you should decide whether to confirm the employee in their role, extend the probation (if allowed by the contract), or terminate employment if it’s not working out. Communicate this decision to the employee in writing. If confirmed, often a letter or meeting will formally congratulate them and inform that probation is successfully completed – possibly noting any changes now (like longer notice period or now eligible for certain benefits). If extended, explain the reason and the new end date, along with any particular goals they need to meet. Extension should generally be for a defined short period – you don’t want probation to just drift indefinitely, as that could undermine the employee’s morale and possibly muddy their rights if, say, they go beyond 2 years without being confirmed (they’d actually gain unfair dismissal protection at 2 years regardless of what you call it).
- Termination during Probation: If you conclude the person isn’t right for the job, probation makes it simpler to dismiss, provided you give the contractual notice (and any accrued holiday pay, etc.). Be sure to follow at least a basic fair process – while someone on probation typically can’t claim unfair dismissal (unless they’ve been there 2 years or more), they can still claim for things like discrimination or if no notice was given. So, document reasons, have a meeting to inform them, and confirm in writing with notice. If it’s gross misconduct, you could terminate immediately without notice (per your disciplinary policy). But usually it’s performance/fit, in which case use the notice period. During probation (and indeed within the first 2 years of employment), the bar for legal risk is lower, but not non-existent. Avoid any hint of discrimination (for example, don’t fire someone during probation because they got pregnant or because they had a health issue – those could lead to claims even day 1).
- Legal Rights During Probation: As mentioned, employees on probation are still employees. They accrue holiday, they are entitled to sick pay (SSP at least), and they have all the protections against discrimination, whistleblower retaliation, etc. that exist from day one. The key difference is the inability to claim ordinary unfair dismissal if terminated with less than 2 years’ service and no discriminatory/whistleblowing factor. Also, no right to statutory redundancy pay below 2 years. So probationary employees are less costly to let go. But do remember to pay out their remaining holidays or have them take them during notice if letting go.
- Workers vs. Probation: Some confuse probation with using a person on a trial basis unpaid or as an intern. That’s not probation – probation is after hiring. If you need to assess someone before hiring, you can do working interviews or short-term paid trials (ensuring minimum wage etc.), but you can’t opt out of paying someone by calling it a trial. Always pay at least National Minimum Wage for any trial work (unless it’s a very short voluntary exercise like to demonstrate skill for a couple hours, but that’s another topic).
In summary, think of probation as a safety net period for both sides. From the company’s perspective, it’s easier to cut losses if the hire was not suitable. From the employee’s perspective, they get a feel for the company and can also leave more easily if it’s not what they expected. Use this period wisely: be clear about expectations from day one, give feedback, and don’t hesitate to exercise the option to extend or terminate if needed. If you do continue the employment after the probation end date without explicitly confirming or extending, the employee will likely be considered confirmed by default. So mark your calendar and take action by the end of the probation period.
When drafting your contracts, include a probation clause with clearly defined length and notice terms. British Contracts can review the probation clauses of your existing contracts for a highly competitive fee under our Bronze and Silver packages. Alternatively, we can provide bespoke employment contracts, including probation provisions, at highly competitive fees under our Gold and Platinum packages. By handling probation transparently and fairly, you set the tone for either a strong ongoing employment or a respectful parting of ways.