Probation Periods – Recent Tribunal Decision

In summary, the key differences from the pre-June 2021 position and post-June 2021 position concerning probation periods is as follows:

• A new or promoted employee may be required to serve a probationary period of not more than six months, commencing on the date of their employment or promotion;
• An employee is entitled to receive from their employer a review of their performance, on or before the completion of the first half of their probationary period;
• An employer may, before the expiration of the initial probationary period, and only after conducting the performance review mentioned in the preceding point, extend the probation period for a maximum of three months;
• During the probationary period (including any extension), the employment may only be terminated without notice by the employer for a reason relating to the employee’s performance review, performance, conduct, or the operational requirements of the business (although this does not apply to employees serving a period of probation after a promotion).

Before these changes were introduced, employers could dismiss an employee during the probation period without cause (i.e. without needing to justify the decision with a reason such as misconduct or poor performance).

Tribunal Decision

Since June 2021, termination of an employee who was on their probation period has been challenged before the Employment and Labour Relations Tribunal (Tribunal).

In a decision dated 21 July 2022, the Tribunal considered a matter where an employee brought a claim of unfair dismissal under the Employment Act, primarily, in light of the following factors:

• The relevant probation period had lapsed, was not extended and, therefore, the employer could not terminate the employee under the probation provision;
• The employer had failed to adhere to the statutory requirements introduced in June 2021; specifically, the requirement to have a mid-probation performance review; and
• There was no cause for termination.

Finding in the employee’s favor, the Tribunal highlighted the post-June 2021 statutory framework and that the employer had failed to follow it, specifically the requirement to have a mid-probation period performance review. The Tribunal further determined that, in the absence of an extension to the employee’s probation, the employee’s probation period ended 11 days prior to the purported termination.

The Tribunal ruled that the employee was unfairly dismissed and awarded the employee the following:

• 16 weeks’ wages;
• ‘notice pay’ of one month (the Tribunal noted its view that it considered the notice period inappropriate for an employee so senior in an organization);
• Payment for vacation days (4.5 days total – prorated for the time employed)
• Payment for other benefits.

Summary

The Tribunal’s ruling confirms that:

• employers need to carefully review new employment contracts and probation policies to ensure they comply with the statutory framework; and
• employers must take care to ensure they are following that framework throughout the probationary period to avoid infringing on employees’ statutory entitlements.

The post-June 2021 legal regime has significantly increased protections for employees and risks for employers in the context of probation periods.

Anyone with any questions concerning legal framework concerning probation periods and how it may impact their business can contact a member of our Employment and Immigration Practice.