Probation Period Pay: How Should We Clarify Payment Terms in Offer Letters?

In our company, we provide an appointment letter containing details regarding the date of joining, probation period, one-month notice details, etc., for fresher candidates. We normally have a six-month probation period for freshers and a three-month probation period for experienced candidates.

Therefore, if we ask someone to resign during their probation period, whether they will be eligible for one-month advance payment is an important consideration. For example, if we inform them that today is their last day, say 01/06/07, will they be eligible for pay from 01/06/07 to 01/07/07? If not, what exactly should be mentioned in the offer letter and appointment letter to make this clear from the outset?

It is essential to address these points in the offer and appointment letters to avoid any confusion regarding payment eligibility during the probation period.

Dear Chanchal,

If you have mentioned the details in the appointment letter, then definitely the company has to pay the same. In most companies, the duration of the notice period is 7 days for employees who are in the probation period.

Regards,
Amit Seth.

I agree completely with Amit. However, just for ease of understanding, I would like to mention:

1. The discretion of deciding the notice period lies with HR in consultation with the management team. It could be different for different levels in the organization.

2. If you choose it to be 30 days, please mention 30 days explicitly and not 1 month. I might sound really off my rocker here, but as long as I can get the message across, it is okay. The reason for specifying 30 days is that technically, a 1-month notice may raise an ambiguity on what should be the duration of the notice period. For example, 1 month could be interpreted as 30, 31, or even 28 days for February. It is universally accepted that 1 month equals 30 days, but you might encounter someone who disagrees, hence the precaution.

3. Next, you might want to specify whether the recoverable amount from the employee would be at the rate of his "basic" component or "gross". Whatever you specify, as Amit said, is what he or you would need to pay.

Regards, PK

Dear Chanchal,

Well regarding the termination during the probation period all depends on what the HR policy says. Here your appointment letter clearly mentions one month notice period, then you will have to pay them one month salary in advance if you terminate them. This is not the policy which most of the companies follow:

Probation period is the time where the employer checks the employee's capabilities and ON JOB performance. Therefore Notice period proposed should be very limited. If the employee is not worth then why have a liability (Salary, Space, Time, Work Quality)for a month. Mostly in Corporate, three days to one weeks notice period is served both by the employer and employee. Or to be in a safer side you may put a cause as follows:

You will be on probation for the period of 3/6 months from the date of joining. On satisfactory completion of this period, your confirmation will be conveyed to you in writing. In case your performance during the probation period is found unsatisfactory, your probation will be extended by a further 3 months.

During the probationary period, the service may be terminated by the company giving 5 days notice whereas as an employee, you will be required to serve a 15 days notice.

After satisfactory completion of the probationary period, your appointment will be confirmed and you will be eligible to get benefits provided by the company. Service may be terminated by either employer or employee by giving one month notice.

In Call centres we take different strand. Here once the employee is observed not performing well, we give them one week's DPA (Daily Action Plan) during which they have to achieve the target. At the end of DPA a terminated letter is given, if no improvement is found.

I personally think you should change the term in your appointment letter in regards to the notice period for employees under probation.

Best regards,

Tina

Dear All,

Please note that whatever your appointment letter says - one month, seven days, fifteen days - please be aware that, as per the law on probation, a person only needs to give one day's notice. Therefore, if an employee resigns, you cannot pressure them to serve a notice period longer than one day. They have the right to quit the job with just one day's notice. You cannot challenge this in a court of law, so be cautious when drafting appointment letters for probationary employees. Always consider the legal aspect.

Regards,
Gagan