Taking on a new team member presents risks as well as opportunities, as it often involves investing your company’s resources into an individual whose full potential and suitability for the business may not be entirely clear.
To reduce these risks, one effective strategy is to implement a probationary period. When executed properly, this approach provides flexibility to assess whether an employee is well-suited to the position and your organisation before making a long-term commitment to the employment relationship.
Our two-part article provides a comprehensive guide to probationary periods. In the first part, we examine the mechanics of probationary periods, offer some tips for ensuring a successful experience and outline the rights of employees during probation.
The second part focuses on addressing any performance or conduct issues that may arise during a probation period and how to dismiss an employee on probation. Additionally, we discuss the Government’s proposals for a new statutory probation period set to be introduced in 2026.
What is a Probationary Period?
When a new employee starts working for your business, you may choose to put in place a probationary period. This is essentially a trial period at the beginning of employment that allows you to evaluate their ability to perform the job and determine whether they are right for your company before confirming their status as a permanent or fixed-term employee.
A probation period is important as it safeguards your financial and business interests, ensuring that you only employ those individuals who have the requisite skills and are well-suited to the permanent role, should it be offered. It can also help save you the time and costs associated with the potential hiring of an unsuitable candidate. Additionally, it allows the employee to gauge whether they are happy working for your business.
Is it Necessary to Include a Probation Period in Employment Contracts? If So, What Should the Clause Cover?
Although there is currently no legal obligation to incorporate a probation period in employment contracts within the UK, doing so can be advantageous for both employers and employees. Should you choose to implement this, it is crucial that you include a clause in your employment contracts that specifies:
- the duration of the probation period
- whether a notice period will be applicable and its length
- your right to extend the probationary period
Additionally, the clause must also expressly state that the employee will not be considered to have successfully completed their probation period unless they receive written confirmation from the employer; otherwise, the probationary period may inadvertently lapse without any discretion to extend it.
It is also advisable to outline your expectations for the role and to inform the employee that their performance will be monitored.
What is the Appropriate Length for a Probationary Period?
There is no definitive guideline regarding the length of a probationary period; it should be determined based on the specific circumstances of each case, taking into account the nature of the job and the time required for the employer to assess performance to confirm continued employment.
Typically, probation periods last between three to six months. A period shorter than three months may not provide sufficient time for you to decide if a new employee is a suitable fit for the organisation. Conversely, except in exceptional circumstances, such as highly complex roles or specific industry standards, a probation period exceeding six months is generally viewed as excessive and may be deemed unreasonable in most employment contexts.
Guidelines for Effectively Managing a Probation Period
Effectively managing a probation period requires that the employee be informed from the beginning about the specific goals and skills that will be assessed to consider their suitability for the business.
Furthermore, it is essential to inform the employee of any scheduled review meetings occurring during the probation period to assess their capabilities and development. Documentation of these meetings should be maintained in the employee’s file.
The following measures can contribute to a successful probation period:
- Establishing Clear Objectives. It is vital to provide the employee with a detailed job description, along with fair and achievable targets and key performance indicators. This clarity is essential for the new hire to understand their role and daily responsibilities.
- Providing Training and Mentoring. At the beginning of the probation period, inquire about the training needs of the new staff member, implement the necessary training and regularly monitor their progress.
- Ensuring Good Communication. Regular check-ins are beneficial for assessing progression and integration into the team. If the employee is not meeting expectations, this presents an opportunity to raise concerns, as improvements cannot occur without open communication. These meetings also allow the employee to voice any issues and provide honest feedback regarding their experience so far.
- Extending the Probation Period if Needed. If the employee hasn’t quite demonstrated their capabilities, you can consider extending the probationary period. This extension can serve as a motivating factor for improvement.
- Conducting a Formal End-of-Probation Review. In this meeting, you can take the appropriate action, such as confirming the employment, extending the probation or terminating the employment. It is important to follow up in writing, and if the employee did not pass their probationary period, provide a clear explanation of where things have gone wrong and keep a written record of this feedback.
What Employment Rights Are Employees Entitled to During a Probationary Period?
Employees undergoing a probation period still retain the same statutory employment rights as other employees. These rights include:
- protection against discrimination
- entitlement to the national minimum wage and protection from unlawful deductions
- paid holidays and rest breaks
- statutory sick pay
- maternity and paternity leave
- time off for dependents
- entitlement to payslips
- the right to a safe working environment
- protection from harassment.
Nonetheless, employees on probation can be offered less generous contractual terms compared to their colleagues who are not on probation. For example, employers may limit access to certain work-related benefits during this period, such as access to bonus schemes, private health care and life assurance. However, any such limitations should be clearly communicated in writing.
Employees on a probation period are generally unable to claim unfair dismissal in most circumstances, including cases of misconduct or poor performance, as they do not meet the requisite two years’ continuous employment with the same employer to pursue such claims. An exception exists for claims of automatic unfair dismissal, which can arise from reasons such as pregnancy or raising health and safety concerns; these claims do not require a minimum period of service.
Extending a Probationary Period
It is only permissible to extend an employee’s probation if the contract of employment explicitly grants the employer the right to do so or by agreement with the employee. As a result, if you want the flexibility to extend the period of probation to further assess the employee’s performance or conduct, you should ensure that this right is included in the employment contract before the probation period commences.
Reasons Why You Might Extend the Probation Period
There are several reasons why a manager may choose to extend a probation period. Typically, this decision arises from the need for additional time to assess the new hire’s capacities or character. Such an extension allows the manager to make a more informed decision about the employee’s long-term suitability for the position without rushing to a conclusion.
The following factors may contribute to a decision to extend a probation period:
- a hope to see improvements in performance
- the employee’s absenteeism due to illness for a significant proportion of their trial period
- the need to address general conduct within the workplace
- the need to see an improvement in attendance or punctuality
- allowing the employee to acquire new skills necessary to meet the required standards
- allowing the employee to meet any targets set.
A probation period extension essentially serves as a second chance for an employee who has the potential to contribute positively to the business. It is, therefore, crucial to communicate to the employee the areas for improvement and the goals they must achieve to secure their position.
Probation Period Extension Letter
If you choose to extend the probationary period, it is essential to inform the employee in writing before the original end date of the probationary period. This correspondence should clearly articulate the rationale behind the decision and specify the new anticipated end date of the probationary period. The letter must also include:
- The grounds for this decision
- The support resources that will be made available to the employee
- The method by which the employee’s progress will be evaluated
- Any particular objectives or targets that the employee is expected to achieve
Furthermore, the employee should be cautioned that failure to meet the required standards of performance or behaviour required of them within the stipulated timeframe may result in the termination of their employment contract.
Avoiding Risks Relating to Probation Period Extensions
To safeguard your business, it is advisable to include a clause in the employee’s contracts that grants you the authority to extend the probation period, which should be signed by both parties at the commencement of employment.
It is also crucial to ensure that your performance review process remains free from bias relating to race, age, gender and other protected characteristics, as such discrimination is prohibited by employment law, even for employees with less than two years of continuous service.
How We Can Help
Probation periods provide an excellent opportunity for employers to assess whether a new hire is suitable for a job and integrates well with the team.
Our knowledgeable employment law team is available to offer ongoing advice and guidance on any issues that may arise regarding new employees, including the management of probation periods. Take advantage of a free, no-obligation, initial consultation with one of our employment law solicitors and call us today on 0330 173 6986 or email us.
FAQ
Are employers legally required to have a probationary period for employees?
A probation period is not a legal requirement. Employers may choose to include one in an employment contract, which can provide greater flexibility during the initial employment phase.
How long should a probation period be?
The length of a probation period varies depending on the role and what is stipulated in the employment contract. Generally, it lasts between 3-6 months for most positions, but it may be longer for senior roles or shorter for contract or fixed-term roles.
What rights do employees have during probation?
Employees still have statutory employment rights, including protection from unlawful discrimination and entitlement to the national minimum wage, breaks and paid holidays. Additionally, they are eligible for statutory sick pay, maternity and paternity leave and time off for dependents. However, they may not have access to the same contractual benefits, such as bonus schemes, private health care and life assurance, as their colleagues who are not on probation.
Can an employee on probation pursue an unfair dismissal claim?
An employee would usually need to have been working for you for at least two years to pursue a claim of unfair dismissal. As a result, an employee on probation cannot technically claim unfair dismissal in the same manner as a permanent employee. However, they can still challenge their dismissal if they believe it was based on unjust grounds, such as discrimination or a violation of the employment contract.
