5 things HR needs to know about probationary periods

Probationary periods are a trial period at the start of the employment relationship designed to provide the employer with better insight into whether or not a successful applicant is suitable, both for the job role and the business. Here are 5 things HR should know about probationary periods:

1. Probationary periods aren’t mentioned in any employment legislation. Therefore, there is no legal requirement to include a probationary period in an employee’s contract of employment.
2. Probationary periods can be an effective tool to monitor performance and conduct in the early stages of employment. They can focus the employer’s attention, especially if the contractual clause prompts an ‘end of probationary review’ with a requirement that this is ‘passed’ before ongoing employment is confirmed.
3. Probationary period clauses in the contract of employment commonly include shorter notice periods to allow for a quick exit should the employee turn out to be a bad fit for any reason. They also sometimes disapply the business’s usual disciplinary and performance management processes, ensuring that the employer has the ability to take a more broad–brush decision, unfettered by formal process, if necessary.
4. Employees don’t (currently) have ordinary unfair dismissal rights until they have worked for two years. This means that probationary clauses can generally be used to dismiss in the early stages of employment with limited risk (but see point 5 below).  Although this limited risk period continues until an employee gains their 2 year protection, it can be easier to link an early dismissal to not ‘passing’ a probationary period.
   
   This may change over the next few years, with the Employment Rights Bill proposing a Day–one right to claim unfair dismissal. This new law would throw out the way probationary clauses may now be used to avoid a formal process for early–stage dismissal.
   
   The Bill currently proposes to introduce an ‘initial period of employment’ where a limited statutory formal process could allow dismissal for conduct or performance reasons. Any contractual probationary period clauses currently in your employment contracts will likely need to be reassessed.
5. Even if you include a probationary period clause, watch out for potential discrimination or whistleblowing risk if you decide to use the clause to dismiss during the early stages of the employment relationship. This is because discrimination and whistleblowing protection applies from day one of the employment relationship, as does protection from dismissal for automatically unfair reasons (eg relating to pregnancy, taking health and safety action, taking family leave, certain trade union actions and others). A probationary period clause does not bypass this.