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The contract

A probationary employee is one who has a conditional employment contract, meaning that the continuation of the contract is conditional on whether the employee can do the work they were appointed to do. The most commonly used method to agree to a specific probationary period is to agree to such a period in the permanent contract of employment offered to the employee. Should the employee not successfully complete the probation period, the employment relationship may come to an end.

Alternatively, the employer may appoint the employee on a fixed-term contract for the purpose of probation. Such a contract will naturally expire on the agreed date and no indefinite employment relationship will come into existence after the natural expiration of the fixed-term contract. It must however be noted that this form of probationary employment contract does not absolve the employer from adhering to the procedures outlined in Schedule 8 of the Labour Relations Act (LRA).

In other words, the employer cannot merely rely on the natural expiration of the fixed-term contract to bring the employment relationship to an end. This is a result of the amendments that were made in section 186 (1)(b) of the LRA.

The expectation of permanent or indefinite employment is now addressed in section 186 (1)(b)

(ii) of the Act:

“Dismissal” means that –

(a) an employer has terminated employment with or without notice;

(b) an employee employed in terms of a fixed-term contract of employment reasonably expected the employer –

(i) to renew a fixed-term contract of employment on the same or similar terms but the employer offered to renew it on less favourable terms, or did not renew it; or

(ii) to remain the employee in employment on an indefinite basis but otherwise on the same or similar terms as the fixed-term contract, but the employer offered to retain the employee on less favourable terms or did not offer to retain the employee.

It is therefore now possible for an employee, regardless of whether the employee earns above or below the earnings threshold to claim that a dismissal took place where a reasonable expectation of permanent employment was created by the employer and not offered.

If the employer fails to address a lack of performance or misconduct during the contract period, reasonable expectation of permanent employment may be created. The employee may argue that the position they applied for was advertised as a permanent position, the position forms part of the structure of the company, the work is of an ongoing nature that they can do the work according to the employer’s expectations unless a lack of performance was addressed as per the requirements of schedule 8 of the LRA.

The above-mentioned may be applicable even where the employer offered to retain the employee on a fixed-term contract that is much more favourable that the last contract that naturally expired.

Poor work performance during the probation

Whilst a probationary period is intended to be used to determine the ability of the newly hired employee to perform, it does not mean that the employer has a free license to dismiss the probationer if performance is lacking. The employer must first adhere to the guidelines established in Schedule 8 of the LRA. “A newly hired employee may be placed on probation for a period that is reasonable given the circumstances of the job. The period should be determined by the nature of the job, and the time it takes to determine the employee’s suitability for continued employment.”

Despite the above, employers frequently misuse the probationary status of the employee to get rid of the employee as a result of misconduct or based on other frivolous reasons. The only legitimate purpose of a probationary period is for the employer to assess the suitability of the employee in terms of their work performance.

The question that arises is whether there is any benefit for the employer to appoint employees on probation. This is because the procedures to be followed to address poor work performance and misconduct are the same as for any permanent employee. The answer to this question is that the procedures to be followed during probation are less formal compared to a permanent employee and less compelling reasons are required to terminate the employment relationship.

The duration of the probation period is not prescribed in legislation and may as such be determined by the employer in line with specific requirements of the position the employee is appointed in. The probation period should however be reasonable and in relation to the circumstances of the job.

“When appropriate, an employer should give an employee whatever evaluation, instruction, training, guidance, or counseling the employee requires to render satisfactory service. Dismissal during the probationary period should be preceded by an opportunity for the employee to state a case in response and to be assisted by a trade union representative or fellow employee.”

This means that the employee’s performance must be monitored from day one, and any shortcomings in work performance must be addressed. By giving the employee the necessary evaluation, counseling, instruction, training, and guidance in order to assist them to achieve and maintain the required work performance standard.

Additionally, the employee must also be given the opportunity to give reasons for what they believe the cause of the non-performance is, and what they believe should be done in order to overcome the problem.

“After probation, an employee should not be dismissed for unsatisfactory performance unless the employer has:

(a) given the employee appropriate evaluation, instruction, training, guidance, or counseling; and

(b) after a reasonable period of time for improvement, the employee continues to perform unsatisfactorily.

The procedure leading to dismissal should include an investigation to establish the reasons for the unsatisfactory performance and the employer should consider other ways, short of dismissal, to remedy the matter.

In the process, the employee should have the right to be heard and to be assisted by a trade union representative or a fellow employee.”

These are very clear requirements. At the end of the probation period, if the employee failed to perform according to the expectations of the employer, the employer cannot simply dismiss the employee.

The employer must be able to show that the above procedure of evaluation, counseling, guidance, and training took place and that the employee was given reasonable time to better their performance.

Dismissal during probation

“Any person determining whether a dismissal for poor work performance is unfair should consider:

(a) whether or not the employee failed to meet a performance standard; and

(b) if the employee did not meet a required performance standard, whether or not:

(i) the employee was aware, or could reasonably be expected to have been aware, of the required performance standard;

(ii) the employee was given a fair opportunity to meet the required performance standard; and

(iii) dismissal was an appropriate sanction for not meeting the required performance standard.”

The employer is therefore required to keep detailed written records and minutes of the various meetings with the employee. These records should include detailed records of what was decided upon between the parties to rectify the matter, what period of improvement was decided upon by agreement between the parties, and what the result was of the implementation of the agreed rectification measures.

Should the employee refer a dispute of unfair dismissal to the CCMA or Bargaining Council, the employer will be required to show, by means of documentary evidence, that they complied with all the above requirements stipulated in the Code of Good Practice – Dismissal.

Key points:

1. Newly hired employees may be placed on probation to determine their suitability.

2. The probation period may be extended but employers must be careful in this regard since the employee may refer this to the CCMA or Bargaining Council as an unfair labour practice. The employer will have to be able to justify its decision.

3. Employees on probation are bound to the same rules and disciplinary procedures as permanent employees.

4. Employees on probation may not be dismissed at the end of the probation period for poor work performance unless the employee was counseled during the probation period and an opportunity was given to the employee to defend themselves against the allegations of poor performance before dismissal is decided upon. In other words, there must be an incapacity inquiry before dismissing the employee for poor performance.


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