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Probationary Periods: A Thing of the Past? 


 

 

 

 

 

 

Probationary periods are a tool long used to test the viability of job candidates. In an economy that continues to have high unemployment, recent graduates, those looking to change careers and those interested in a specific company may be particularly open to a probationary period that lets them get their foot in the door. However, without adequate protections, when completed, a probationary period may create an expectation on behalf of the new employee – and, more importantly, in the eyes of a court – that the employee cannot be fired at will.

 

Probationary periods make sense when employers have collective bargaining agreements with unions requiring employers to have “cause” to discharge an employee. As a result, employers frequently negotiate with unions for a probationary period during which they can discharge an employee without “cause” and without the employee having access to the union grievance procedures or arbitration. However, in a non-union setting, this reason for probationary periods does not exit.

 

The most significant downside to a probationary period is the potential effect on the employment-at-will doctrine that is the law of most states. In general, that doctrine states that absent a contract to the contrary, an employer can terminate an employee for any legal reason or for no reason at all. Some courts may see the completion of the probationary period as having created an implied promise that the employer will not fire the employee absent good cause.

 

The employee could argue that completing a probationary period is evidence proving that the employer itself found that the employee had the requisite qualifications to perform the job functions of his or her position – an essential element of a discrimination claim. Keep in mind that probationary employees have the same rights by law as any other employee outside of unions and public sector companies.

 

Probationary periods are most appropriate if an employer can identify significant differences between someone on probation and someone who is past it; the ability to terminate a probationary period “without cause” is not an appropriate reason, as an employer can terminate an employee without cause. 

 

Therefore, if you must have a probationary period, make sure your policies clearly identify the significance of the probationary period. Consider the following:

 

1.    How are employees evaluated different during the probationary period versus after?

2.    Is there additional or regular evaluation during the probation?

3.    What is an appropriate length of the probationary period?

4.    How does your probationary period apply to part-time or temporary workers?

5.    What happens at the end of a probationary period?

6.    What if you need to extend a probationary period? If so, how long?

7.    How will this affect your progressive discipline policy?

8.    What happens when an employee changes positions within the company or departments? Does he/she need to pass an additional probationary period?

 

If you cannot identify significant differences between a probationary employee and one who has completed their probationary period, you should consider discontinuing or not implementing the policy all together. If, however, probationary periods are regarded as essential to your company, be sure to make them meaningful and consistent. When a probationary employee is hired, include in the offer letter that employment remains at-will regardless of the completion of a probationary period, and put this rule in your employment handbook, too.

 

There is no way to fully insulate an employer form liability in any termination. Utilizing a probationary period can only complicate matters. Instead, consider implementing an initial review period where you will provide regular, scheduled, constructive feedback to the new hire. Frequent, documented feedback, will help employees understand how well they fit into the company and will support employers in the event an employee needs to be terminated.

 

 

 

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About Us

BCH has a unique approach to advising our clients on how to control their Total Cost of Risk, not simply insurance cost. The Total Cost of Risk (TCOR) includes preventive, direct and indirect costs associated with operating a business. The BCH approach includes collaborating with our clients to create a long range written plan for controlling their TCOR .