The importance of a probation period when hiring new employees

The importance of a probation period when hiring new employees

A probation period for new employees is an excellent way for employers to legally see whether or not someone is a good fit for the company. It also works both ways; an employee has the opportunity to work in a company and find out if they are happy to stay in the job or not. The Labour Relations Act 66 of 1995 schedule 8 deals with probation periods. 

The Acts says: 

8. Probation.—(1) (a) An employer may require a newly-hired employee to serve a period of probation before the appointment of the employee is confirmed.

(b) The purpose of probation is to give the employer an opportunity to evaluate the employee’s performance before confirming the appointment.

(c) Probation should not be used for purposes not contemplated by this Code to deprive employees of the status of permanent employment. For example, a practice of dismissing employees who complete their probation periods and replacing them with newly-hired employees, is not consistent with the purpose of probation and constitutes an unfair labour practice.

(d) The period of probation should be determined in advance and be of reasonable duration. The length of the probationary period should be determined with reference to the nature of the job and the time it takes to determine the employee’s suitability for continued employment.

(e) During the probationary period, the employee’s performance should be assessed. An employer should give an employee reasonable evaluation, instruction, training, guidance or counselling in order to allow the employee to render a satisfactory service.

( f ) If the employer determines that the employee’s performance is below standard, the employer should advise the employee of any aspects in which the employer considers the employee to be failing to meet the required performance standards. If the employer believes that the employee is incompetent, the employer should advise the employee of the respects in which the employee is not competent. The employer may either extend the probationary period or dismiss the employee after complying with subitems (g) or (h), as the case may be.

(g) The period of probation may only be extended for a reason that relates to the purpose of probation. The period of extension should not be disproportionate to the legitimate purpose that the employer seeks to achieve.

(h) An employer may only decide to dismiss an employee or extend the probationary period after the employer has invited the employee to make representations and has considered any representations made. A trade union representative or fellow employee may make the representations on behalf of the employee.

(i) If the employer decides to dismiss the employee or to extend the probationary period, the employer should advise the employee of his or her rights to refer the matter to a council having jurisdiction, or to the Commission.

( j) Any person making a decision about the fairness of a dismissal of an employee for poor work performance during or on expiry of the probationary period ought to accept reasons for dismissal that may be less compelling than would be the case in dismissals effected after the completion of the probationary period.

(2) After probation, an employee should not be dismissed for unsatisfactory performance unless the employer has—

(a) given the employee appropriate evaluation, instruction, training, guidance or counselling; and

(b) after a reasonable period of time for improvement, the employee continues to perform unsatisfactorily.

(3) The procedure leading to dismissal should include an investigation to establish the reasons for the unsatisfactory performance and the employer should consider other ways, short of dismissal, to remedy the matter.

(4) In the process, the employee should have the right to be heard and to be assisted by a trade union representative or a fellow employee.

Probation periods are not mandatory and do not have to be three months. 

Probation periods in South Africa are not mandatory; however, if you choose to implement one, the correct procedures need to be followed.

  • As regulated by the LRA, probation periods apply to newly hired employees only and not employees who get promoted. 

  • Statutory probation and the applicable requirements, period, and any other requirements must be agreed upon upfront in the employment contract.

  • A probation clause is not mandatory – you can decide if it is necessary when appointing an employee.

  • The probationary status of an employee is only applicable to issues of work performance (competence) – it has no relevance to misconduct perpetrated by the employee during probation, nor is it an easy way out for you based on a subjective issue concerning the employee. Other than work performance (competence), all matters are to be handled in the same way as you would with a permanent employee. You must follow a fair disciplinary process. A probationary employee is entitled to protection by the labour law.

  • There is no prescribed probation period length. The convention in South Africa is three months – the only requirement is that it must be "reasonable", and it is dependent on the nature of the job.

  • Probation does not mean you can get rid of the new employee if you are unhappy with their performance. You must follow the correct process and meet the legal requirements. The dismissal process must be 'substantively and procedurally fair'.

Why should you include a probation clause? 

We recommend including a probation clause in an employment contract for permanent hires for many reasons, which we will look at below. However, the primary reason is that a probation period gives you insight into the employee's competence to perform the job which lowers your hiring risk as a company.

Test the skills in action during the probation period. 

A probation period allows you to test and measure a person's skills in action. You can also observe any concerning traits that require you to follow the disciplinary process. For example, during the interview process, you will have observed personality traits that you love in a candidate and credentials in some critical skills for the job. When you see these skills and characteristics in your company's context, you will be able to gauge whether there are any gaps and the actual level of the skills. 

When you watch someone perform their skills during a probation period, you, as the employer, will be able to determine whether or not they need upskilling, further support or are not competent to perform their duties before you commit for the long-term.

Tip: An essential aspect of the probation period is that you adequately measure these skills and then communicate vital development areas to the employee so that they have the opportunity to improve. The measures safeguard you should you need to terminate the employment contract during or after the probation period. The process is factual and evidence-based, and NOT personal. 

Measure performance and productivity

When you have set a clearly defined and measurable work plan in place, dealing with non-performance is an easy problem to solve during a probationary period. Aside from the work plan with quantifiable variables included, it's beneficial to make sure you've communicated your expectations to the new employee. Always allow them the time and support to rise to the expectation you set out, this will be a significant determining factor, and within a probation period, you can do this legally. 

Have a fair probation clause in place

The probation period allows you to onboard an employee with a conditional agreement in place. Put a fair probation clause into the employment contract to have an understanding in place before they start working at the company. It must contain the time frame of the probation period, any terms surrounding termination or notice periods, and your right as an employer to extend the time if you see fit. 

Consider the length of time you expect an employee to demonstrate their skills and ability to do the job. It doesn't matter how long a probation period is, as long as you can justify it with sound reasoning. 

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