Can a Company Let Go of an Employee on Probation Without a Clear Reason? Seeking Advice

Can an Employee Under Probation Be Relieved Without Any Justification or Reason?

Following are the terms mentioned in the appointment letter, which he came to know only after 3 months of joining because the company issued it after a delay:

• 3 months' notice from either side needs to be given while on probation or confirmed.
• Performance will be evaluated after 6 months of probation; if found satisfactory, the employee will be confirmed.

No evaluation was done after 6 months as no assignments or KRAs were defined during that period. After 9 months, the employee received a call saying he would be required to look for another job as his chemistry doesn't match with the HOD.

Need advice on what steps my friend can take.

Termination During Probation

An employee does not exercise any lien on employment during probation. Normally, the appointment letter will show that the service during the probation period can be terminated without any reason and without giving any notice. This means no cause is required to end the contract of employment during probation.

At the same time, if the termination is on the grounds of performance, you can ask for proof of non-performance and demand that the employee was not granted any opportunity to prove their performance. Therefore, even if the reason for termination is poor performance, the termination letter will not specify any reason but will just state that following clause No... of the appointment order/contract of employment, your service stands terminated with effect from... date. That's all, and that termination is valid also.

In some cases, due to negligence or overconfidence, HR may play smart by calling upon the employee and stating that their performance has been poor and they are going to be terminated. This will lead to difficulties unless you have proof of poor performance and have provided adequate opportunities to the employee to improve it.

Regards,
Madhu.T.K

Thank you for the quick reply. I have one more point to understand here: isn't the employer required to intimate the extension of the probation period? There is no basis for poor performance as no assignment was allotted. He was recruited to replace one person who had earlier resigned (after working for a long time with the company), but suddenly that person took back his resignation, and the newly appointed fellow was in a duplicate position. It was an easy option for management to remove the new one. I think this kind of gamble should not be done with someone's career. Can you suggest some remedies against the company?

Probation and Confirmation Communication

For extending probation, there is no need for any communication, but for confirming service, written communication is required. This means that until a confirmation communication is given, the employee is deemed to be on probation only.

Risks in Employment Decisions

It may be true that when an existing employee on notice period withdraws his resignation, the newly employed person would have become surplus, forcing the employer to terminate the service of the new person. There is no other way. Just understand that every decision involves an element of risk. A decision to change employment also involves a greater element of risk. The risk may be due to several reasons. Even an experienced person may find it uncomfortable in a new place, leading to his resignation or the employer asking him to leave. It is certainly unfortunate, but we cannot blame anyone for this. In the present case, what has happened is due to this risk.

Regards,
Madhu.T.K

My query is with respect to the first paragraph only. You have written that "For extending probation, there is no need for any communication, but for confirming service, a written communication is required. That means until a communication of confirmation is given, the employee is deemed to be on probation only."

However, one of the HR consultants, who is a lawyer by profession and handles labor cases, told me the exact opposite. He had informed me that probation by itself will not get extended unless it is extended by the employer with specific communication to the employee. If the employee does not receive any communication, then he is deemed to have been confirmed.

However, he had shared this information with me some 5-6 years ago. I am unaware of any subsequent changes that may have occurred.

In view of the contradicting opinions, would you mind giving a reference to the verdict of any court or a certain section of labor law?

Thanks,

Dinesh V. Divekar

There are a lot of cases held on this topic, and the views expressed by the learned judges have been similar. I have attached two cases for your perusal.

Regards,
Madhu.T.K

Thank you for sharing the documents. Due to a shortage of time, I could only go through one case and not both cases. The Honorable judge has dismissed the petition. However, the judgment does not specify any time frame by which a probationer should be confirmed. Considering the implications of this judgment, what if the employer terminates an employee after three or four years?

Anyway, thanks once again.

Regards,
Dinesh V Divekar

Understanding Probation Periods and Employment Policies

Probation is the period during which a person is expected to improve their skills to match the job profile. It is also a time for aligning oneself with the new organizational culture. Depending on the nature of the job, the probation period may range from six months to one year or even three years, in accordance with the company's policy. An employee may grasp the job role and organizational culture faster, leading to early confirmation. However, if the employee fails to demonstrate efficiency, the probation period can be extended indefinitely. In such a scenario, the employee should self-assess and identify areas for improvement. While self-assessment is valuable, one's true performance can only be evaluated by others. If an employee realizes they are not meeting the employer's expectations, they have the option to request training in deficient areas or resign.

Although employing someone on a Fixed-Term Contract (FTC) and repeatedly extending it for years is deemed an unfair labor practice under the Industrial Disputes Act, the law does not address employers extending an employee's probation period due to poor performance. Evaluating an employee's performance is primarily the responsibility of the appraiser. The law does not mandate an employer to retain an underperforming employee. If performance issues are communicated to the employee, it is their prerogative to continue working for the employer or seek employment elsewhere. Labor market dynamics determine the ease of finding employment; when labor demand is high, employees have more opportunities, whereas in a low-supply labor market, employers may strive to retain staff at all costs. This is a common phenomenon.

Regards,
Madhu.T.K