How to Handle Termination for Non-Performance During Extended Probation?

Dear Colleagues, can anyone share views and guide on how to draft a letter of termination for an employee who was provided an opportunity after 6 months of probation? During this period, his superior assessed his performance, provided feedback, and management jointly decided to extend his probation period for 3 months. However, after only 1.5 months, he has been creating a nuisance in the department instead of focusing on improving his performance.

We have now decided to terminate his service due to non-performance, although his extended 90-day probation period is yet to be completed.

Could anyone provide guidance on how to handle this situation?

Regards, Vipul

1) What are the terms of the appointment letter?

2) The employer is entitled to terminate the employee during the probation period if the employee's work is not satisfactory to the employer. Have you given him written intimation regarding the extension of the probation? If your documentation is up to date on performance counseling during the period, you can go ahead and terminate him with notice as specified in the offer letter.

Termination During Probation Period

Normally, the appointment order shall contain a clause that states, "during probation, your services can be terminated without assigning any reason and without giving notice." If this is the wording used by you, you can simply give him a letter stating that "following clause... of the contract of employment, your service stands terminated with effect from...." There is no need to write that your performance has been poor or your conduct is bad; nothing is required.

If you write like this, then the termination will lead to a stigma, and the employee will challenge it. In case your appointment order has nothing like termination 'without assigning any reason during probation,' then you will have to give him an opportunity to be heard by giving him a show cause notice and calling him to defend the charges, etc. It is perfectly right that the employee will not have any lien on employment during the probation period, and it is not necessary that the employer should wait until the probation is over or the extended period of probation is over but can initiate termination before that.

Avoiding Stigmatic Termination

What is important is that if you show the reason for termination, like poor performance, then the termination will become stigmatic, and in such a scenario, the action should be taken only after giving the employee sufficient opportunities to be heard. Still, the process involved is simple. Since you have carried out a course of performance appraisal, you can just ask him to face another course of appraisal and based on the same, you may terminate him at the earliest.

Extension Letter and Employee Acceptance

Was an extension letter mentioning poor performance issued to the employee, and did he sign in acceptance? If the answer is yes to both, then the employee's services can be separated.

Discharge Solicitor vs. Termination

Please be aware that in such cases, it is considered 'discharge solicitor' and not termination. Mentioning the word termination implies attaching stigma to the employee. These views are upheld by various courts of law, including the Supreme Court.

Relieving Letter Recommendation

After addressing the shortfall in expectations in the relieving letter, it is advisable to state, 'You will cease to be our employee after the working hours of (date).'

A simple question raised from a practical perspective has, in fact, eventually assumed piquancy and greater in-depth analysis by the responses from our learned members of the forum.

Probation in employment

"PROBATION," in the realm of employment, is the prefixed period of service in the contract of employment during which the employee is given the opportunity to understand his role and orient himself with the work culture of the organization. In other words, the very purpose of placing a newly appointed employee on probation is to try him during the probationary period to assess his suitability for the job only. Thus, the period of probation gives a sort of locus poenitentiae to the employer—i.e., the right to withdraw from the projected contract of employment before being finally bound—to observe the work, ability, efficiency, sincerity, and competence of the probationer. If he is not found suitable for the post, the employer reserves his right to dispense with his services without anything more during or at the end of the prescribed period. This is the gist of the judgment of the Supreme Court in Ajeet Singh vs. State of Punjab [1983 (46) FLR 487].

Questions regarding probation

Having found so, certain questions naturally arise as follows:

1) Whether a probationer can be discharged during the period of probation?
2) Whether a notice of discharge to the probationer on the ground of unsatisfactory performance is necessary?
3) Whether an inquiry is necessary to discharge a probationer?

Regarding the first question, the only answer is an emphatic "NO" based on the well-settled law. Probation must see its duration, and the employer has to wait till the end of it and cannot do so midway, though he is not satisfied with the performance of the probationer. The right to terminate on the ground of unsatisfactory performance, if any, arises only on the expiry of the period of probation. This is the ratio decidendi of the judgment of the Supreme Court in Express Newspapers Ltd., vs. Labor Court, Madras [1964 (1) LLJ 9]. However, this is not applicable to a case of premature curtailment of the period of probation on account of misconduct by the probationer where he is given an opportunity to explain the charge against him. Coming to the case of termination during the period of extended probation, the above restriction will not apply as the order of extension itself is an indication that the probationer's performance was not satisfactory during his initial tenure and he was expected to improve it during the extended period. Here, the employer need not wait till its expiry and can terminate the probationer's service pending the extended period as per the contract of employment, so opined by Mr. Madhu.

As regards the second question, termination of the services of a probationer without any notice or assigning any reasons therefor as per the contract of employment is only a discharge simpliciter and certainly not a punitive simpliciter. In the case of Governing Council of Kidwai Memorial Institute of Oncology vs. Dr. Pandurang Godwalkar and Another [1993 (1) LLJ 308], the Supreme Court held that even under the general law, the services of the probationer can be terminated after making an overall assessment of his performance during the period of probation and no notice is required to be given before termination of such service.

Coming to the third question, discharging a probationer for unsatisfactory performance by an order of simpliciter does not amount to punishment. A probationer's work report or performance appraisal is given by the person under whom the probationer is working. No inquiry is contemplated in respect of any observation made in the work report unless it is alleged to be with any malice. If the employer is not satisfied with the work of the probationer, his services can be terminated without any further inquiry or providing further opportunity to him.

Issuing an Extension Letter for Poor Performance

Was an extension letter mentioning poor performance issued to the employee, and did he sign in acceptance? If the answer is yes to both, then the employee's services can be separated. Please be aware that in such cases, it is considered 'discharge simpliciter' and not termination. Using the word 'termination' implies attaching stigma to the employee. These views are supported by various courts of law, including the Supreme Court.

Including a Statement in the Relieving Letter

After addressing the shortfall in expectations in the relieving letter, it is advisable to include the statement, 'You will cease to be our employee after working hours of (date).'

The Purpose of the Probation Period

I feel the probation period is for providing time:

• To provide the employee with a clear job description.
• To provide clear performance standards and what is expected of them.
• To acquaint the employee with office procedures and practices.
• To allow the employee to know the organizational procedures (orientation).
• To provide departmental objectives and usefulness to the new employee.
• To assist the employee in learning the departmental evaluation system.
• To allow the employee to set and adjust to their new working environment.
• To make the employee feel what it means to have a regular employee status.
• To have an idea of the employee's performance and assist in improvement.
• To make the employee feel the care taken for development to departmental needs.

If the employee is not ready as expected even after an extended period of probation, a proposal for amicable separation would be the best alternative.