An employee who has been dismissed will normally need 2 years’ service with their employer in order to be able to lodge a claim in an Employment Tribunal if they consider that their dismissal was unfair. So, generally speaking an employer will not be required to go through a disciplinary or performance management procedure when the employee is under their probationary period as there won’t normally be a risk of an unfair dismissal claim. However, there are other potential claims a dismissed employee may have which could still cause the employer a headache and cost them money to settle or defend. The use of probationary periods can be helpful and provided that employment contracts and other relevant policies are correctly drafted, the risk of other claims arising can be significantly reduced.
Employers should have policies in place to cover disciplinary action against employees for misconduct and also a policy covering performance management to cover the necessary processes involved where an employee is not performing up to the required standards in their role. Whilst it is important to have these policies in place and to ensure that they are followed in relation to employees who do have the requisite service to make an unfair dismissal claim, it is advisable that these policies are clearly marked as ‘non-contractual’. Not only does this allow the employer discretion to amend the policies without having to consult with the employees (though they may wish to do so), it also means that the employer will not be under a contractual or legal obligation to follow those procedures if they want to dismiss someone during their probationary period or within the first 2 years of employment. Employers should make sure that the policies themselves state that they are non contractual and also that any reference in the contract of employment to disciplinary and grievance procedures also confirms their non-contractual status. Otherwise, employees may be able to claim damages for breach of their employment contract. However, It may be that in some cases the employer would benefit from using its discretion to follow the policies in place. For example, if there have been allegations of misconduct, proper investigation may show that those allegations were untrue or blown out of proportion or in the case of initial poor performance, it may be that the employee is just taking some time to settle in and with some extra guidance could become a key member of the team.
So, what then is the point of a probationary period if an employer can dismiss someone with up to 2 years’ service without a significant risk of a claim? Firstly, it is good practice to manage the expectations of a new employee and make them aware that their continued employment is subject to a trial period and that they will need to demonstrate their suitability for the position. They will effectively be put on notice that they may be dismissed if they do not successfully pass their probationary period which will often make new employees eager to show their skills and potential. It can also be a useful trigger for employers who will then be prompted to carry out a review of the employee’s performance where otherwise they may let poorly performing employees continue in their role to the detriment of the business (and the employee!). Secondly, many contracts will have enhanced notice periods beyond what an employee would be entitled to under legislation. This will often be the case where the appointment is for a senior position and can in some cases be 6 months or longer. If an employer wants to dismiss someone who is not pulling their weight, it can then be quite a sting for them to either keep that person for another 6 months or pay them in lieu of their notice period and employ a replacement. One of the key benefits of a probationary period is that it will normally make provision for a shorter notice period (often of one week) until the employer confirms that the probationary period has been successfully completed.
It will, however, be important to remember that in some situations there will be no qualifying service requirement for an employee to make a claim against the employer. If an employer is found to have discriminated against an employee for a reason connected with their age, sex, sexual orientation, gender reassignment, religion, race, marriage or civil partnership, pregnancy or disability then that employee can bring a claim against their employer regardless of how long they have been employed. There are also other enhanced rights for employees who are dismissed for raising health and safety concerns, whistleblowing or for their involvement in trade union activities. So, although there is considerable flexibility for employers to be able to dismiss employees who are not right for the team, there is still scope for claims to be made and so it is important to ensure that legal advice is sought where appropriate. If you have any questions or would like further advice in relation to drafting probationary periods and ensuring that policies and contracts are in order, or in relation to dismissals generally, please get in touch with Hayley or Hannah.