“We have a performance issue with an employee who is coming to the end of their 3-month probationary period.
How long can we extend the probationary period?”
An employer may choose to make the continued employment of a new recruit subject to the successful completion of a probationary (or trial) period by including provisions to this effect in the contract of employment. The purpose of a probationary period is to allow both parties to test the suitability of the role to the individual and of the individual to the role, and to terminate the employment on shorter notice than would otherwise apply should it become apparent that things are not working out (provided that any such notice period is not less than one week after continuous service between one month and two years to satisfy statutory minimum notice requirements).
While there is no law regulating how long a probationary period should be, there is an expectation that it must be reasonable. Generally, a probationary period is likely to be between three and six months, depending on the nature and seniority of the role in question, and the employer’s requirements.
If an employer is not yet convinced of the employee’s suitability for the role by the end of the probationary period, and believes that with further training and more time the employee’s performance may improve, it may decide to extend the probation rather than simply terminate the employment, or allow the employee to ‘pass’ their probation.
Usually the provisions governing the extension of a probationary period (including the circumstances under which it may be extended and the maximum duration of such an extension) are included in the employee’s contract of employment.
If there is no provision for an extension, the probationary period will naturally come to a close at the end of the relevant period, and the employee will be entitled to the standard contractual notice if the employer were to decide to terminate the contract at any time after that stage – unless the parties agree to extend the probationary period, by consent, prior to it ending. In practice, it is likely that an employee would be inclined to agree an extension if the alternative might be dismissal.
When it comes to extending a probationary period, an employer should be in mind that:
- any extension should not take the employment too close to, or beyond, the qualifying period for an unfair dismissal claim (2 years’ service), as this may make the probationary period of no practical use if the employee has already qualified for unfair dismissal protection.
- there is no qualifying period needed to bring a discrimination claim, so if the reason for the extension, or the manner in which it is implemented, appears to target an employee who has a protected characteristic there may be risk of a claim under the Equality Act 2010.
- it may therefore be prudent for the employer to consider setting out in writing the reasons for any extension, what is expected for the employee to pass the probationary period (e.g. particular issues that need to be addressed, or targets that need to be achieved), and the new expiry date.
- the potential relevance to the implied term of trust and confidence, particularly where the extension or the duration of it is wholly unreasonable in the circumstances, or where the employer has acted irrationally in the exercise of any discretion it may have under the contract to extend the probationary period.
Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.
Motor Industry Legal Services
Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.