A probationary period is a trial phase at the start of a new employment relationship, during which both the employer and the employee assess the suitability of the role. They are usually three to six months in duration. They are a useful tool for employers if used effectively. Here are our top tips:

  1. Include a clear probationary clause in the contract of employment

Probationary periods only exist if written into the contract of employment. Employers wishing to utilise a probationary period should consider including the following in any express contractual clause:

  • A statement of the length of the probationary period
  • A mechanism allowing the employer to extend the probationary period with a clear process for how this will be communicated
  • A shorter notice period to be applicable during the probationary period – to minimise the financial outlay for the business if things don’t work out
  • A statement that the business’s full disciplinary and performance management processes will not apply during any probationary period

  1. Don’t use probation to avoid legal rights

Employees have day one rights, including protection from discrimination, a written statement of terms, holiday accrual, and sick pay. A probationary clause can’t override these.

  1. Dismissals: low unfair dismissal risk (for now)

Currently, ordinary unfair dismissal rights only kick in after two years’ service. This significantly reduces the risk of a fast-tracked probationary dismissal (and is the reason why many employers follow a limited formal process for such dismissals). However, discrimination claims are still possible, as are most claims for automatic unfair dismissal, if the employee alleges that their probationary dismissal was for an automatically unfair reason (for example, whistleblowing or health and safety). Employers should check whether any of these risks are ‘in play’ before progressing a failure of probation dismissal.

  1. Apply the clause properly

If you set shorter notice during probation, act before probation ends. In Przybylska v Modus Telecom Ltd, the employer had a probationary clause allowing for dismissal with one week’s notice in the probationary period, rising to three months after that. The employer gave one week’s notice a few days after the probationary period had elapsed. This was wrong and the employer had to pay the full three-month notice period.

You can, however, guard against this risk by including contractual wording that probation continues until you confirm in writing that the employee has successfully completed it.

  1. Looking ahead: Employment Rights Bill

The Employment Rights Bill proposes to remove the current two-year qualifying period for ordinary unfair dismissal. Ordinary unfair dismissal will become a day one right. On the face of it, this would appear to significantly undermine the utility of probationary period clauses. However:

  • This change is not going to come in until 2027 at the earliest. Probationary period clauses remain valid and usable in full for the next few years, until the change comes in.
  • The provisions in the Employment Rights Bill provide for a potentially ‘lighter touch’ procedure which could be used to dismiss during the first (likely nine) months of employment (the ‘initial period of employment’ or ‘IPE’). We don’t know exactly what a lighter touch process will involve – this will be confirmed by future regulation. However, pre-existing probationary period clauses may be able to be used to frame employer behaviour and actions during the IPE.
  • Embedding probation reviews now will prepare you for this future model. Having a workforce which is used to assessing performance and conduct actively during the probationary period will mean that the business will already be set up to make ‘early doors’ decisions on long-term employability under the future IPE model.

Probationary periods remain a practical tool for managing early performance and conduct, but HR must use them carefully – and be ready to adapt once the new rules arrive.