How small businesses can use probation periods effectively

Given that previous research has found that almost a fifth of new employees actually fail their initial trial, probation periods are an important process when hiring new talent and small business should use them effectively. 

When an employee starts a new job they usually have to undergo a period of probation that allows the employers to monitor their ability to carry out the job role. These periods typically last for about three months, but depending on the company they can sometimes last up to six months. If the employer is not satisfied with the standard of work during this time they can terminate the contract, usually with a week’s notice.

Once the employee has passed the probationary period, they may then receive full access to the company’s benefits and an extended notice period will be agreed. This can usually range from between two weeks to three months depending on the position that the employee holds at the time. 

At the start of employment, the staff member should be informed of the terms of their probation period in their Contract of Employment and how they will be assessed. It should also be explained that permanent employment will depend on their performance during this period.

By holding regular meetings during an employee’s probation, any problems or areas that require improvement can be discussed. If an employee fails their probation period, dismissals should be conducted in a formal meeting to explain why and then followed up in writing. 

It is also important to note that employees will need to be paid in full up to the end of their employment. Usually at this stage employees will not have built up enough service to be able to claim unfair dismissal, although this may not be the case for an existing employee who has undergone a probation period following a promotion.

Following on from this point, employers must be aware that unfair dismissal can be claimed when the employment is terminated as a result of poor performance, attendance or time-keeping caused by disability.

Although these may be fair reasons for ending an employee’s contract, they may be classed as discriminatory under the Equality Act 2010 if these issues have been caused by a disability. 

To avoid this becoming a costly case of unfair dismissal for the employer, these issues should be discussed with the employee in the first instance to see if any reasonable measures can be taken – this could include allowing the employee to work from home on occasions where their disability prevents them from going into work. 

Overall, probation periods are an effective way of ensuring that the most suitable members of staff are brought into the business. They can be used to deal with any issues or concerns that may arise whilst the employee is still being assessed.  

From the start, the employee must be properly informed of the performance and behaviour requirements that are expected, and this should always be clearly stated in the Contract of Employment.

If it is decided not to continue with the employee’s employment after this period, the Contract of Employment must be water-tight and able to stand up to any scrutiny.

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