Trial and probation periods are a good way of deciding whether an employee has the right skills and is fit for your business. Trial periods have a maximum limit of 90 days or three months, whereas probation periods last around six months. While the terms probation and trial period are fairly interchangeable, the employment agreement should specifically state that the 90-day trial period is a trial period. This article will compare whether a probation or trial period is right for your business.
What Are 90-Day Trial Periods?
90-day trial periods allow employers to terminate a new employee without repercussion or providing any reason. Employers must undertake the termination within 90 days of the employee’s employment. However, trial periods are not available to all employers. For a 90-day trial period to be valid, the following criteria must be met:
- both the employer and the employee agree to the 90-day trial period before they commence work;
- you record the agreement in writing;
- you have 19 or fewer employees; and
- you have not previously employed the employee.
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How Can Employers Enforce 90-Day Trial Periods?
Acting as the probationary period, 90-day trial periods give employers an advantage in an employment relationship, indicating the relevant laws are quite stringent. If you miss a step or do not follow the rules around the trial periods, they are likely to be invalid.
A common pitfall amongst employers is that they assume the 90-day trial period refers to 90 working days. However, a 90-day trial period includes any weekends and public holidays from the beginning of employment.
90-day trial periods may also be fewer than 90 days. However, as an employer, it would be more advantageous to utilise the entire 90 days rather than shorten the period. If you choose to use a shorter notice period, remember that you cannot extend the trial period to 90 days after the fact.
Continue reading this article below the formWhat Are Probation Periods?
Probation periods are slightly more flexible compared to 90-day trial periods. Employers typically use probation periods when onboarding new employees. However, you can also use probation periods for existing employees, particularly if they have changed roles in the company and you want to see if they are a right fit for the new role.
Suppose you want to use a probation period for your employees. In that case, you must ensure that:
- you state this in the employment agreement; and
- the employee is aware of the probation period and how long the probation period will last.
Nevertheless, the length of the probation period should be enough for you to determine whether the employee is suitable for the role. Any unnecessarily long probation periods could deter new employees or lead to potential disputes.
Can an Employer Dismiss an Employee During a Probation Period?
If you want to terminate an employee on probation, this is more difficult than if they were on a trial period. Terminating on probation requires good reason, and you must follow the proper procedure for dismissing an employee.
You must also be aware that if the proper procedure is not followed, the employee can still raise a personal grievance for unjustified/unfair dismissal, just as an employee not on probation would be able to.
Additionally, an unfair dismissal claim can pose significant damages in terms of reputation and finances. As a result, you must be aware of the proper procedure before a personal grievance is raised.
Key Takeaways
90-day trial periods and probation periods are similar. Both periods allow employers to test whether an employee fits the role and company. Nevertheless, 90-day trial periods are suited for small businesses with 19 or fewer employees. Employers must ensure that they follow the strict guidelines of 90-day trial periods in utilising the provision. 90-day trial periods allow employers to terminate a new employee without repercussion or providing any reason provided you follow a proper procedure. On the other hand, probation periods can last a longer period of time. However, if you wish to terminate an employee during a probation period, you must follow the standard dismissal process to avoid any claims for a personal grievance.
If you want to know more about incorporating a 90-day trial period or probation period into your employment agreements, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 447 119 or visit our membership page.
Frequently Asked Questions
90-day trial periods are only for employers who have 19 or fewer employees.
No, they can only be used for new employees who have never worked with the company.
No. When terminating an employee on a probation period, you should follow the same procedure as terminating an employee without a probation period.
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