Probationary Period – What Happens If You Do Nothing

Many employers prefer to subject new employees to a period of probation – indeed, there are many advantages to this approach. But what’s the legal position if you do nothing at the end of it?

Hidden advantage

Some legal experts take the view that formal probation periods for new hires are pointless, primarily because anyone who’s been employed since 6 April 2012 now has to accrue two years’ continuous service before they can claim unfair dismissal. But the truth is that a well-structured probation period – which will tend to last anywhere between three and six months – offers the employer a number of benefits.

A number of benefits

Firstly, with a carefully worded probation period clause, you can provide for much shorter notice throughout the entire probation period, e.g. one week (or even less during the first full month of employment). Our probation period clause in the employment contracts allows for this.

Tip – Furthermore, it also makes it clear that during the probation period your disciplinary procedure does not apply. This is perfectly acceptable.

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As you mean to go on

Secondly, by subjecting a new hire to a period of probation they will be acutely aware that:

  • their performance is under constant review
  • they are at risk of losing their job if their conduct or performance isn’t up to scratch.

This means that not only will they try harder to impress you, they’ll be used to their performance being monitored on an ongoing basis.

It is important to ensure that the probation period is sufficient in length to enable you to provide/train the employee so that they have the organisational knowledge (system, processes etc) to work in your business and for them to have demonstrated their capability in delivering it without you hand-holding them.

Far too often we see employers sign someone off at the end of the training period and then become frustrated that the employee’s performance just seems to decline immediately after. Our advice to make the probationary period 6 months in length – 3 months for you to train and then 3 months for them to get their performance to the level that means that they have met your standards.

Probation lapses

At the end of probation you can:

  1. confirm employment;
  2. apply an extension (assuming, that you have grounds for this decision); or
  3. terminate employment if things haven’t worked out.

But what if you do nothing, perhaps because you’ve been busy, and the end of the probation period passes with no action being taken either way on your part?

No problem with a review

The general rule is that a probation period will be deemed complete when it expires without either:

  1. being extended; or
  2. the employee being dismissed.

In other words, employment will be confirmed in this situation. However, there is an exception to this rule.

Tip – As part of the probation process, you should carry out a final review, but the law allows you to do this after the probation period has expired where you’ve reserved this right and the final review is carried out in a reasonable time.

If you want continual access to the most up to date employment contracts / handbooks / HR documents/templates including all that you need to deal with probationary periods please have a look at our Online HR Toolkit.