How to Terminate an Employee During Probation

When hiring a new or inexperienced permanent employee, employers may opt to include in their employment agreement an initial period at the start of employment. This affords the employer an opportunity to assess whether their new employee is capable, reliable, and suitable for the role. This is called a probationary period or probation. If the employee is not suited to the role, there are less obstacles to terminating the employee during this period. 

Can you terminate an employee during their probation period?

It is considered best practice for an employer to have a policy in respect of managing and possibly terminating employees during their probationary period. The first step, before the employee starts work, is drafting an employment agreement that clearly states the length of the probationary period including the start and the end dates, and specified in what circumstances the probation may be extended and for how long. 

In the first week of employment, you should tell the employee what you expect of them in terms of skills, tasks, deadlines, punctuality, and conduct. 

Dismissing an employee during their probation period

If the probation period is not going well, an employer can choose to dismiss the employee. The dismissal process must be the same as dealing with any other employee. 

Employers must make a fair assessment of the employee and their ability to do the job. If the employer decides to end their employment, they must tell the employee why they are wanting to do this and give them a chance to respond. Employers must consider the response and if they still choose to end the employment, they must give the amount of notice stated in the employment agreement. 

An employee can submit an unfair dismissal claim if they believe: 

• They did not receive the support and training they needed to do the job well.

• The employer did not have a good reason for dismissing them.

• The assessment process was unjustified. 

Before the probationary period ends, you should meet with the employee and let them know whether they have passed probation. If they are unsuccessful, you can extend their probationary period if the employment agreement allows for it, or end their employment.  

If you are ending their employment, it is ideal to meet with the employee to provide feedback about their performance or conduct and explain why the probation period was unsuccessful. 

Always confirm the outcome of the meeting in writing to the employee whether successful or unsuccessful, and if you intend to extend the probation or terminate their employment, and keep a copy as well as a written record of the discussion during the meeting. 

Valid reasons for termination

If you choose to terminate an employee during probation, it is best to provide a reason that can be supported with evidence if required. 

If the probation period has gone beyond the minimum employment period, you should not dismiss any employee without a valid, sound, and defensible reason given the circumstances, and a fair dismissal process. This is to minimise the risks of a subsequent unjustifiable dismissal claim. 

Valid reasons are varied and fall under four key areas: 

• Capacity – if the employee lacks the ability, or is incapable, of completing the inherent requirements of their role.

• Performance – if the employee’s skill level or quality of work is below what is required for the job, or if they are not meeting the standards outlined in their employment contract due to a lack of care or diligence.

• Serious Misconduct – when an employee partakes in behaviour that is out of line with company policy, goes against the terms of an employment agreement, or is unlawful.

• Redundancy – when an employer either decides they no longer need an employee’s job to be done by anyone, or the employer becomes insolvent or bankrupt.

Notice and warning 

Employees who are on probation have the same entitlements as a permanent full-time or part-time employee including wage entitlements, sick leave, annual leave, and notice. So, once you have decided you do not wish to continue their employment you should meet with the employee to inform them of the reasons their probation is unsuccessful. 

You are required to give the employee sufficient written notification of the day their employment will end. The notice period varies, depending on how long an employee has worked within the business, and the applicable employment agreement.  

The employee can either work during the notice period or alternatively the employer must make payment of the notice in lieu, which is to be included in the employee’s final pay along with any other entitlements owing, which may include, but is not limited to, outstanding wages and unused (annual) leave entitlements. 

Notice is paid at the employee’s full pay rate as if they had worked the minimum notice period, so payment in lieu of notice can include incentive-based payments and bonuses, loadings, allowances and overtime or penalty rates. 

During the probationary period

During the probationary period you as the employer must follow a fair process. This includes: 

• Informing the employee of any issues with their work or performance (and if there is, there’s a chance their employment might not continue after their probationary period ends).

• Telling them what the issues are, and provide guidance and examples of what good performance in their area is like.

• Giving the employee support, and ongoing appropriate training.

• Giving the employee the opportunity to improve. This means providing helpful feedback, support, and training throughout the probationary period so they know the issues, and have an opportunity to improve before the end of the probationary period. 

It is good practice for employers to tell an employee on a probationary period when they might expect to receive training and feedback at the start of their employment. The employer must follow through on any commitments they have made to the employee. 

In some situations, work is going so well that an employer may choose to remove the probationary period and confirm employment early. This can be done if the employee agrees; the agreement should be in writing because it is a change to the employment agreement. 

At the end of the probation period 

If the work hasn’t gone well:

 As an employer you can’t just tell an employee to leave their job at the end of the probation period. You must assess them fairly and, if their work wasn’t good enough, you must tell the employee why it was not good enough and you intend to end their employment. 

You must also give the employee an opportunity to respond to these points. If, after considering any response, you decide to end the employee’s employment you must give the employee the notice in their employment agreement. 

As this is a complex area, it may be prudent to call us for free initial advice on 0800 675 700 if you are considering terminating an employee during their probation period. 

Alternatively, explore our BrightHR software to help you manage your business and your new employees, for example to store documents and keep track of performance issues and employee entitlements.   

Keep Your Documents Safely and Easily with BrightHR 

Use the modern way to store documents with BrightHR. Its vibrant and intuitive hub makes uploading, storing, and viewing staff documents as easy as anything else. 

With BrightHR’s document storage you can:

• Update someone’s salary or check the company handbook in seconds.

• Request read receipts from employees when uploading documents in the company folder.

• Set up staff so they can update their own unrestricted personal info (when they move to a new address, for instance).

• Get instant notifications for important dates.

• When someone reaches the end of their probation or it’s time to renew an employee’s driving licence, you will know about it. 

BrightHR just make your HR management so much easier. Bring your business into the digital age now. Find out more.