One of the common questions we are asked is whether or not an employer can extend the probationary period for recent joiners.
Employers routinely make use of probationary periods for new employees. A candidate who looks good on paper may not be the right person for the job or may simply not meet the required standards. By allowing themselves an initial probationary period (typically 3 to 6 months), employers can test the waters with new employees before deciding whether to retain their services permanently.
In some instances, employers may need more time to assess a new employee and therefore wish to extend probation. How does this work in practice?
Starting point: the contract
The first port of call is the employment contract.
An express probation clause will typically set out the duration of the probation period and provide that either party can terminate at relatively short notice (typically one week). The employer may also have the right to pay in lieu of notice, to give it some flexibility in getting the employee out immediately, if needed.
Some, but in our experience not all, contracts deal with extending the probationary period. This is normally stated to be at the employer’s discretion, whereby probation can be extended for a set length of time. Some contracts will also state that the probationary period should be treated as continuing, until such time as the employer notifies the employee that it has been successfully completed. In these cases, employees should be notified of the reason for any extension, the new expiry date and what is expected of them to pass the extended probation.
No express provision
If the contract is silent on the right to extend, employers have three options:
1. Dismiss the employee before the probationary period ends: an employer could seek to terminate the employee’s employment in line with their contract. In most circumstances, this is relatively low-risk from a legal perspective. The employee will not have, for example, the requisite 2 years’ continuous service to bring an unfair dismissal claim. There is no requirement to follow a lengthy dismissal process, unless there are contractual disciplinary procedures in place. Further, although some claims do not require a minimum period of service (such as discrimination or whistleblowing), this risk can be minimised by providing the employee with clear, written reasons for termination focusing on, for example, their underperformance.
In practical terms, this option does remove the employer’s ability to assess the employee over a longer period, when significant investment may already have been made in recruiting and training them, and hiring a replacement may duplicate those costs.
2. Allow the employee to pass the probationary period: employers can choose to take a risk by retaining employees beyond the set probationary period. However, in so doing, employers usually trigger a longer notice period in the individual’s employment contract. This approach may not be ideal if an employer has reservations about an individual’s performance or suitability for the role – particularly in smaller organisations.
3. Agree an extension: employees may agree to vary their contract to extend the probationary period, as this offers them an opportunity to prove their value to the employer. If this option is being considered, we recommend ensuring that the discussion happens in good time before the original probationary period expires. If the discussions continue beyond this point without being resolved, the employee is likely to be entitled to a longer notice period.