Should Companies Use Probationary Periods?

Probationary periods originated when unionized companies wanted to provide a provisional employment period that would not be covered by the same termination requirements found in their Collective Bargaining Agreements (CBA).

Probationary periods were a way to terminate a new union employee without worrying about just cause or other rules in the CBA.

Many non-union companies now provide new hires with an introductory period that’s often viewed as a trial period for both the employee and the employer.  Many of these companies are “at-will” employers, meaning that they have no CBA or other employment contracts with employees.

As such, either party may terminate the at-will employment relationship at any time for any reason.

There are no laws requiring employers to use probationary periods and no laws specifically governing terminations during such periods.

Given all this, should an at-will employer be using probationary periods for new hires?

HR POINTER:  Our recommendation is that non-union organizations should not use a “probationary period.”  Such employers can use an “introductory period.”

The fact is that in today’s legal environment, the term, “probationary period” may have a legal connotation that implies some level of secured employment after completing the stated time period.

The term “introductory period” presents less of a legal risk.

However, terminating an employee at any stage of the employment relationship is risky unless there are specific performance or behaviors expectations that are not being met.

The fact is that any supervisor “worth his/her salt” will be able to make a retain or terminate decision on a new employee within 30 days on the employee’s date of hire.

Any supervisor who after 60 days is still struggling with the retain or terminate decision should be terminated him/herself and replaced with a competent manager.

Organizations need to understand that as the days beyond date of hire tick past 30 days for a new employee, the liability of the company grows.

As such, retain or terminate decisions need to be made quickly and fairly, with the employee having been given a reasonable period of time to correct any performance or behavior issues.

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