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Q&A: When it’s time to terminate

Peter Done

Q: I have an employee who is currently in their probationary period, but is not showing signs of meeting the criteria of the role. Am I within my rights to terminate their contract if this continues?

A: All employers should make it clear to the employee at a start of a probationary period that they will monitor the employee throughout the whole duration, and then assess their suitability before making their role permanent.

It is best practice that the contract of employment contains all the terms and conditions of the probationary period and, additionally, the employee should be made aware of the standard of performance that needs to be met. The consequences, if that standard fails to be achieved, should also be set out.

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Provided that the contract allows you to continually review the employee’s performance throughout the probationary period, you do not need to wait until the end of it to take any action. At any point during the period you could decide to terminate employment if the employee is not proving suitable.

Although the employee does not have sufficient service in order to make a claim to an employment tribunal for unfair dismissal (two years), it is still possible for an automatic unfair dismissal claim to be made. This kind of dismissal may occur when the employee is dismissed for a discriminatory reason, for example, or because they have tried to assert a statutory right to, for example, their statement of main terms, or an itemised pay statement.

You should, therefore, be able to demonstrate the reason for the dismissal, or at least be able to show that the reason was not one which could lead to an automatic unfair dismissal claim.

Although you have no legal obligation to employ someone for the entirety of their probationary period, you have not given the employee the full opportunity to improve if you terminate the contract before the end of the probationary period. You may want to consider extending the probation period to give the employee more time to get better, but still holding them within the period of assessment after which you can decide whether they are ultimately suitable or not to be confirmed in the position.

The situation is different for employees who are placed in a probation period after changing jobs within an organisation, via promotion or otherwise. It is more likely that these employees will have sufficient service to bring an unfair dismissal claim so failure to pass a probationary period in these circumstances should not be treated as a reason to terminate the employee’s employment with the organisation as a whole.

Peter Done is managing director of law firm Peninsula