How to dismiss an employee on probation

Head of Employment at Taylor Emmet LLP, Matthew Ainscough guides you through how to set up an effective probationary period for employees and how to dismiss someone on probation while minimising the risk of a wrongful dismissal claim.

Probationary periods are not a statutory requirement; however, they can be a useful tool for both the employer and employee in the early stages of an employment relationship. In this post, I am going to look closely at the main issues that might arise around the use of probationary periods, including dismissing an employee while they are on probation or at the end of their probationary period.

Using a probationary period

The purpose of a probationary period is to provide a suitable amount of time for the employer to assess the employee. Therefore, a probationary period is advisable for most employees.

Learn more: Should businesses scrap probation periods?

How long should the probationary period be?

The length of probation is likely to depend on the nature of the job and how long it will take the employer to assess the employee’s performance. It is fairly common to see probationary periods of three or six months and for the employee's contract to say that, during the probationary period, their employment can be terminated on shorter notice than that which they will be entitled to once probation is successfully completed (subject to the minimum statutory notice period).

Probation in employment contracts

Writing a probation clause in an employment contract

A clause setting out the terms of the probationary period should be included in the employee’s written contract of employment. The clause should specify how long the probationary period will last and when the probationary period will be reviewed. It should also specify whether the employer has the right to extend the probationary period and if so for how long, what benefits will apply during the probationary period, and the period of notice of termination that will apply during the probationary period.

How to structure a probationary period

It is important for an employer to structure an employee's probationary period to ensure that:

The employee is aware from the outset of the approach that the employer intends to follow, any specific goals or targets that they are expected to achieve, and the dates on which any review meetings will take place.
Information on the employee's performance can be gathered and considered by the employer in good time. It is important not to wait until the end of the probationary period to discover that an employee is under-performing.
Feedback is given to the employee on their progress and whether they are meeting the employer's expectations. An employee may not appreciate that informal feedback is intended to let them know that they are not meeting expectations and tell them how they need to improve. To avoid uncertainty or confusion, an employer may prefer to fix formal meetings at stages throughout the employee's probationary period. A record should be kept of feedback that is given to the employee, copies of which should be kept on the employee's file and given to the employee. The outcome should be confirmed in writing, including any extension of the probationary period (where applicable) and any steps required of the employee going forward.
The employer decides whether to confirm the employee in employment and communicate this decision to the employee (giving notice to terminate employment if necessary, see below) before the end of the probationary period. By putting itself under a positive obligation to do this, the employer reduces the chance of an employee successfully completing their probation "by default" simply because the end of the probationary period comes and goes without being noticed or addressed, which can create problems for the employer, such as inadvertently giving them a longer notice period.

Extending an employee's probation

Extending employee probation

If an employee is not meeting the standard required, guidance should be given on the standards of performance or conduct that the employee needs to achieve. If necessary, and provided that the employer has a contractual right, the employer can extend the probationary period before the original probationary period expires. The employer should notify the employee in advance that their probation is being extended. In doing so, the employer should advise the employee of the following:

The reasons why the employer is unable to confirm the employee in post. The employee needs to be able to understand what aspects of their performance require improvement and what they will need to do to improve in the extended period of probation.
Any particular improvement that is expected of the employee and any identifiable goals they need to achieve.
The new date on which the employee's probation will now end and details of any review meetings that will take place during this additional period. The employee should be given the dates on which review meetings will take place. It will be important for the process of feedback to be maintained through the additional probationary period.

If the employer does not have a contractual right to extend an employee's probationary period, the employer can invite the employee to agree to one. An employee may be willing to agree to an extension if they consider this will give them the chance to keep their employment, if refusing could result in their being dismissed.

Absence and probationary periods

In some cases, an employee may be absent during their probationary period.

If the absence is for a reason related to disability, pregnancy or maternity leave, the employer will need to resist the temptation to regard the employee as unsatisfactory and instead consider extending the employee's probationary period. If not, the employer is at risk of a discrimination claim.

However, if the sickness absence is not related to a disability or pregnancy or maternity, then the employer should be safe to dismiss on the grounds of poor attendance.

Dismissing an employee on probation

Some employers worry that an employee may bring a claim for unfair dismissal if they are dismissed. In most cases, however, an employee will not have worked for the employer for long enough by the end of their probation to enable them to make an unfair dismissal claim. An employee needs to have two years of continuous service to bring an unfair dismissal claim (though there are some exceptions to this rule, for example dismissing an employee for raising concerns about health and safety).

Please also see our guide to wrongful dismissal claims, which a dismissed employee within their probationary period may be able to make.

Learn more: What are the 5 fair reasons for dismissal?

Speaking generally, if the employer is acting in good faith, a claim of unfair dismissal is not a big risk. The employer must also ensure that any dismissal is not discriminatory.

Do you need to follow a dismissal procedure?

If the employer is comfortable that the employee will not bring any other claims against it, the employer may decide not to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures in dismissing the employee. However, an employer should consider whether there is a contractual disciplinary or capability process that applies to employees during their probationary period.

Failure to follow a contractual procedure could give rise to a breach of contract claim. It is rare that a disciplinary procedure is contractual in nature; if it is, an employer is well advised to take advice on whether (and how) to change the policy.

It is often advisable to follow some sort of basic procedure prior to dismissing an employee on probation, even where there is no contractual requirement to do so and the employer is confident that the reason for dismissal is unrelated to any of the claims that can be pursued without requiring two years’ service. This is because following a procedure is likely to ensure that there is a paper trail setting out the employer's reasons for terminating employment; this may assist the employer in demonstrating the real reason for dismissal if the employee does bring a claim.

Learn more: Employment tribunals: the costs for employers

Dismissal procedure for someone on probation

As a bare minimum, the following is recommended:

Invite the employee to a probationary review meeting to discuss any issues relating to their performance or conduct (in writing).
Notify the employee that the company is considering terminating their contract, subject to any representations that they make at the review meeting.
Advise the employee of their right to be accompanied (by a work colleague or a trade union representative).
Provide evidence that supports any performance concerns and give the employee an opportunity to respond.
Decide on appropriate action, after considering any alternatives, such as extending the probation period.
Confirm the outcome to the employee in writing and clearly set out the reason for the dismissal.

It is important that managers are fully aware of how to handle a probationary period and the myhrtoolkit HR software system can support this process effectively. Myhrtoolkit helps businesses issue, track, and store all their HR documents, making it easier to manage probation documents and other relevant information for your probationary employees, including contracts, contact information, and records of absence.

Find out more about how myhrtoolkit can help you manage your HR documents

Written by Matthew Ainscough

Matthew Ainscough is a Fellow of the Chartered Institute of Legal Executives (FCILEx), specialising in discrimination and employment litigation. He is a Senior Associate and Head of Employment Law at law firm Taylor & Emmet Solicitors. He writes about specialist employment law topics and issues.