Probationary Periods and why using them carefully is so important

Probationary Periods and why using them carefully is so important

November 10, 2018

Since April 2020 your contracts of employment need to show whether you have a probationary period.

But remember they only occur once in employment, they don’t reappear when you issue a new contract or when someone has a promotion or new title.

Probationary Periods have to be used carefully. For example if your contract has a clause that probationary periods can be extended or that employment can be terminated in the probationary period with less notice than if the probationary period is completed, the employer must be sure to exercise his decisions in a timely fashion.

Przybylska v Modus Telecom Limited

In Przybylska v Modus Telecom Limited when Miss Przybylska was recruited, her contract included a term that the employment was subject to a three-month probationary period. At the end of the probationary period, there would be an objective performance assessment which in turn would establish whether or not the employment would be confirmed. At the discretion of management, the probationary period could be extended.

The contract also stated that during the probationary period, Przybylska was entitled to one week’s notice if she was dismissed but, on successful completion of the probationary period, this notice period would increase to three months.

The end of Przybylska’s three-month probationary period fell on 2 January, when she was on holiday. Due to the holidays, the three-month performance assessment did not take place until 19 January. At that time, her manager took the view that her performance had not been satisfactory and, following the assessment, her employment was terminated with one week’s pay in lieu of notice. Przybylska brought a tribunal claim asserting that she was entitled to three months’ notice and that the payment of only one week’s pay in lieu was a breach of contract.

Taking into account the wording of Przybylska’s contract, the EAT found that her probationary period came to an end automatically on the date it ended, in other words, at the three-month point. This was despite the fact that the employee was on holiday at the time, as a result of which the employer had not had the opportunity to conduct the end of probation assessment or decide whether her appointment should be confirmed at the correct time.

The EAT pointed out that the employer could have notified Przybylska before the start of the Christmas/new year holiday period that her probationary period would be extended until such time as her manager could carry out the performance assessment. But the employer had not done this. It followed that Przybylska was entitled to three months’ notice on termination.

What do we need to learn from this EAT decision?

Where employees’ contracts contain clauses that provide for different (usually less favourable) terms and conditions during any probationary period, it will be particularly important to define clearly when the probationary period ends and to take any action that is required at that time. If an employee’s probationary period comes to an end without management having taken any action to confirm (or otherwise) the employee’s employment, the employee will be entitled to conclude that the probation is complete and that any (usually more favourable terms) of the contract which are stated to apply post-probation are now in force.
We recommend…
That you have a 6 month probationary period and that you undertake regular reviews during the probationary period to give the employee feedback on their performance. Then you have the evidence to support any decision that you make at the end of the probationary period.
If you need any assistance, please do not hesitate to contacts us on 01527 909436.

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