Why managers really do need to get on top of probationary periods

It is quite common for an employer to include a clause in an offer letter or contract of employment stating that an individual is subject to a probationary period of a particular duration. The notice period during that probation period is often a much shorter period than the notice period that would apply once the person has passed their probation. For example, it might only be a weeks’ notice during the probationary period but thereafter the employee might be on three months’ notice.
The clause that the employer includes in the contract may make reference to the fact that the probationary period might be extended perhaps if somebody’s performance during the probationary period is not satisfactory.

Having set themselves up in a really good way I often then see employers who fail to diarise a probationary review and miss the deadline or opportunity to extend the probationary period. It is relatively old law now but the case of Przybylska v Modus Telecom Ltd illustrates the problem perfectly. The employee had been engaged on a contract where the first three months of her employment was a probationary period during which time she was entitled to a week’s notice. The company reserved the right to extend the initial three-month probationary period and the notice clause referred to her entitlement being three months’ notice following the successful completion of the probationary period. The three months’ notice period was due to expire on the 2nd January 2006 but that was a New Year bank holiday so the employee wasn’t back in work until the 4th. The company she worked for didn’t expressly exercise the right to extend her probationary period prior to 2nd January, instead they invited her to a probationary review meeting on 12th January, which actually took place on the 19th. At that point the manager informed her that her employment was being terminated because she hadn’t completed her probation period. She was given a letter purporting to pay her one weeks’ notice.

The employee brought a claim for breach of contract arguing that because the employer hadn’t extended the three-month probationary period she was actually entitled to three months’ notice thus claiming three months’ pay less one week she’d received. Unsurprisingly based on the wording of the contract the employee was successful – the employer had failed to operate its power when it had the chance to do so i.e. prior to 2nd January.

This illustrates perfectly why it’s important to conduct probationary review meetings during the probationary period and confirm any extension to such a period prior to the original probationary period lapsing. Alternately you could specifically draft into the clause that probation will continue until the employer confirms in writing that somebody has successfully completed it.