Probationary Clauses and Their Pitfalls

A familiar scenario.

In this article we will attempt to shed light on the pitfalls of probationary clauses in employment contracts. We’ve all been there, you’re in a time-crunch to get the orders out and your only option is to appoint the last-minute candidate. He or she seems like an average candidate. You doubt that reference checks will be useful regardless. During this dilemma, you opt for a probationary contract. If the employee fits in well, you will keep him or her on, if not, you’ll end the contract and hopefully do better with the next appointment.

Does the above dilemma sound familiar? This remains a prevalent problem in our dynamic labour market where employers constantly feel pressured to employ new employees swiftly to meet their customers’ demands.

The fixed-term contract and the probationary clause attached.

The reason why you should be aware of the above scenario may surprise you. The main pitfall is not the poorly planned appointments, the lack of reference checks, or following the correct procedure in monitoring of the employee during the probation period.

Granted, all the above could lead to disputes, but the main pitfall is the employer’s ignorance of the nature of the employee’s contract i.e. his or her fixed-term contract and the probationary clause attached to it.

Although the law regarding the use of fixed-term contracts changed five years ago in 2015, employers are still getting it wrong. For example, there is a pending bargaining council dispute where the employer fixed the employee’s period of employment on “one month.” Shockingly, the next clause of the employee’s contract states that this is also the actual length of the employee’s probation.

So how should probation clauses be applied correctly to avoid pitfalls?

Before entering a contract with a new employee, you must assess your needs. Do you need to assess the employee’s capabilities before permanently appointing him or her or do you need his or her services for a limited duration or specific project?

If the former is true and you are not sure whether the employee is capable of fitting into your company’s system or is competent, the appropriate choice is to appoint the employee on a permanent basis subject to a probation clause. During the probation period the employee must be given feedback as to whether they are meeting the required performance standards of the employer or where they are falling short – this feedback must be documented. If the employee is not up to the standard and shows no improvement after your input, you can conduct a probationary enquiry and either extend the probationary period or terminate the employment contract before the employee’s employment becomes permanent.

If the latter is true and there is a genuine need for fixed-term employment, the employee may be employed on a temporary basis but the reason for the temporary employment must be recorded on the contract. These fixed-term contracts may be extended if the genuine need persists beyond the initial expiration date but employers must be careful of not rolling contracts and creating a legitimate expectation of continued employment.

Contact us for expert legal advice

Are you concerned that you are not using your fixed-term contracts correctly? Do you want to avoid possible penalties in the CCMA and Bargaining Councils due to unfair contracts? Avoid unnecessary time crunches and contact our expert Labour Specialists today to schedule a call to talk about your situation.