Q. We have a probationary clause in our contracts but are not utilising it. Can you advise on best practice and how to deal with an employee who is not performing well?

Recruitment and Selection processes have improved over the years, with the invention of more measured and targeted assessment of candidates such as assessment centres, psychometric testing and competency based interviews. We are in a much better position, statistically speaking, to be able to identify the candidate that will make a success of the position you are recruiting for, in a reasonable amount of time after their induction into your organisation. That said, we are yet to come up with perfect selection methods and unfortunately a proportion of new recruits will not meet performance requirements.

This WILL happen in your organisation, sooner or later. The direct and indirect costs of continuing to employ an employee who lacks the capability or competency to fulfil their role can be significant. In today’s climate there is no more room for the ‘dead wood’ scenario (awful metaphor, but it is used a lot)? We prefer to say it's a classic case of ‘square peg in a round hole’. In short though, whatever you call it, it is a drain on resources and potentially costing the business. There is no more compelling argument for making proper use of probationary clauses in your contracts, to allow for a swift resolution.

There is also an additional benefit to tightly managing probation periods. Research suggests that focussing on a positive induction of new employees and providing regular review of performance as part of a probationary period will lead to quicker integration, more rapid delivery of required levels of performance, higher retention rates and the ability to reinforce organisational culture, values and expectations.

Must we Include a Probationary Period?

There is no legal requirement to use probationary periods but they are commonly used. The typical duration is 3 or 6 months, depending on the position. The probation allows for the employer to assess the suitability of the employee in terms of performance, capability, competency, skills and general conduct against the standards required in the job role.

Best Practice for Probationary Periods

• Stipulate the performance standards from the outset and clearly communicate these.
• The agreed standards should form the basis for assessment during the probationary period.
• Be clear in the job offer/contract that a probationary period applies, that the employee will be assessed and their employment may be terminated if they do not reach the required standards of performance.

During the probationary period, the line manager should conduct regular informal reviews with the employee to establish if they are meeting the job requirements and, if not, what support or training might help them succeed in their role.

• Keep a note of these discussions (these will be important later if the employee fails to meet agreed standards).
• Ensure feedback about any areas of concern is done regularly - the outcome of probation should not come as a surprise!
• Aim to be supportive but clearly remind the employee of the contractual implications of failing probation. Some mistakes will be inevitable, make sure a reasonable level of support and / or training is provided.

Before the end of the probationary period invite the employee, in writing, to a formal probationary review hearing to discuss their progress in the role and decide whether their employment will be confirmed or not. Possible outcomes may include;

• confirming the appointment;
• extending the probationary period or;
• terminating employment if their progress is unsatisfactory.

The format of the meeting should be in accordance with any formal employment meeting (refer to the LRA code of practice).

• The employee is provided with all of the information with regard to their performance in advance of the meeting;
• before any decision is made, the employee should be given the opportunity to comment on any concerns raised;
• the employee is given the right to be accompanied;
• the right of appeal is extended if the employment contract is terminated.

What if the Employee has Worked Beyond the Probationary Period Stipulated in the Contract?

Unless there has been an agreed extension to a contractual probationary period (the option to do so may be written into the clause in the contract) it difficult for the employer to rely on failure within a probationary period to end the employee’s employment. Whilst those with less than a year’s service (two outside of NI) will not be able to bring a case of unfair dismissal there is the risk that the employee will bring a claim for unlawful discrimination, which has no minimum service requirement. Failure to hold regular probationary reviews and a formal meeting and effectively ambushing the employee with the revelation that they are not up to the job, can often be interpreted as a smokescreen for other issues, not least by the tribunals.

How do we Extend the Probationary Period?

• Ensure the contractual term includes the possibility that probation will be extended to allow for a prolonged period of review where necessary.
• Be clear that the extension is for a fixed period and confirm in writing.
• At the formal review explain why the extension has been applied, what the employee needs to do to achieve the standards required and what support, if any, is offered such as further training. Summarise this in writing and provide the employee with a copy.

Automatically Unfair Dismissal

A common issue, particularly amongst smaller employers, is to use dismissal at the end of a probationary period as a catch-all to deal with all issues or niggles they have about the new employee. Some common underlying reasons are listed below, none of which are appropriate reasons for dismissal and could lead to a claim for ‘automatic unfair dismissal’ as well as the potential for discrimination claims;

• Absences early on in employment relating to a disability.
• Announcement of a pregnancy.
• Unexpected requests for statutory family leave.
• Raising a grievance early on.
• Unexpected trade union allegiance and activity.

Applying Probation When an Employee Changes Job 

It is not uncommon to see probationary period clauses in contracts given to employees who are successful in applying for a new post with the same employer. This is useful in providing a framework for providing feedback and agreeing relevant training and support, however terminating employment of an established employee in a new role without following a fair performance capability procedure is likely to be deemed unfair as employees with more than a year’s service cannot be regarded a ‘new’ employees.