Stuck in Probation Limbo: Can My Company Demand a Notice Period or Compensation?

Probation and Termination Clauses in Employment Agreement

I have been working in an organization for a year. I signed an offer letter which has many clauses and can be construed as a mutual agreement between me and the employer. Following are the relevant clauses in this case:

Clause 5: "You would be on probation for the initial six months. If your performance is found unsatisfactory, the company reserves the right to extend your probation period up to a maximum of six months or terminate your employment immediately. You are not entitled to any promotions or increments during your probation. If your performance remains unsatisfactory during the probation extension, the company can terminate your services without notice."

Clause 15: "Your service can be terminated by either party giving the other three months' notice or three months' salary including allowances in lieu of notice."

The company did not confirm or terminate me within one year as stated in Clause 5. It repeatedly extended my probation without communication. I have not been confirmed yet, and the company has not followed the offer letter. Due to the risks of prolonged probation, I resigned to avoid arbitrary termination.

Now, the company demands I serve notice or compensation based on Clause 15. My argument is that the company breached Clause 5 and cannot enforce Clause 15. Additionally, serving notice is void as I am still on probation.

Despite my good relations in the company, I am willing to serve a reasonable one-month notice for a smooth handover. The company offers a "smooth exit" with only a relieving letter, not an experience letter due to reasons like not serving notice or penalties.

I have requested an experience letter multiple times, but to no avail. What do the experts on this forum suggest?

Though your probation period was extended from time to time as per the terms of the contract of employment on the ground of performance, you were neither terminated by the management nor confirmed until you opted to resign. Therefore, you are still in the service of the establishment as a probationer only, and as such, you are bound to comply with the notice clause of the unilateral termination of the contract of employment. It is, however, up to the management to waive it completely or relax it as they did in response to your resignation. Reading between the lines, I can understand your tacit acceptance of the performance appraisal by the management. It would be better to accept the offer by the company and smoothly relieve yourself to find another job that suits your employability.

I hope this helps clarify the situation for you.

Best regards, [Your Name]

Probation Extension and Its Implications

The contract states that the probation can be extended to a maximum of six months (initial six plus this six equals 12 months). The word "maximum" is crucial here. I am assured that the extension of my probation was not due to my performance but rather internal discrepancies—because my manager had approved my confirmation a long time ago, and I was even awarded for my work.

Although the company didn't terminate my services, extending my probation beyond what was agreed upon is irrational and perhaps illegal. I agree that I am still obliged to serve the company as a probationer, but the company has unscrupulously prolonged the probation of about 40 people, including me. While on probation, I am not entitled to appraisals, increments, and other benefits.

Raising this issue, the company has issued back-dated confirmation letters to 39 of them, while trying to terminate me by just giving a relieving letter and not an experience letter; they call it a "smooth exit."

Also, the company has been selectively releasing employees by providing all the relevant letters. For example, one of the employees who had the same notice period as mine (3 months) exited in a month. He didn't receive any kind of compensation but was provided with letters on time.

How can the company's policies be different for individual cases? How can the company strictly follow the rules in some cases while having lenient policies in others?

Dear friend, In this forum, the questions raised in a thread are answered by the readers based only on the factual information provided by the writer. If some pieces of vital information relating to the questions are withheld by the writer for obvious reasons or revealed on a piecemeal basis in his successive posts, some of the earlier answers may become inappropriate or even wrong. Therefore, the presentation of all the factual information in a single go without any omission by the writer alone can enable the readers to suggest the answers to the queries effectively.

Coming to your problem: Probation, being a definite period of trial to assess the suitability of the new recruit to hold the position substantively, enables the employer to simply terminate his services at the end of the period specified on the reason of documented unsatisfactory performance or extend the period of probation for some more time if any so mentioned in the employment contract. If he is allowed to continue his services even past the extended period of probation without any explicit orders of confirmation, his status of employment is a probationer only in the absence of a specific clause enabling deeming confirmation in the contract. The legality or otherwise of such a situation depends upon one's perception. The employer's act of keeping the employee still in service as a probationer again and again despite his perceived unsuitability may be viewed as a measure of sympathy or as an act of unfair labor practice. The secret is best known only to the concerned employer and the employee.

When the fact remains that you were a star performer even as a probationer and along with you some 40 probationers faced the same fate of extended probations beyond the limit prescribed, what prevented you from agitating such a practice? When the rest 39 were confirmed back-dated, why you alone were chosen to send out with just a relieving letter remains unexplained. Anyway, now, only two options are before you - one is fighting the case with moral courage and the other is to wriggle out of this bad situation and unscrupulous company tactfully to get better employment elsewhere.

I request you to treat this as my reply to your private message also.

Thank you, Umakanthan, for your valuable advice! I didn't present all vital information in a single article to maintain brevity and encourage readability of the whole thread.

It is apparent that our prolonged extension was an act of unfair labor practice by the employer. Though almost each of the 40 individuals had the same grievance, only I raised a concern to the HRD and subsequently resigned from my position, citing insecurity and unnecessary delays in the process. During this course, everyone, including me (not only the rest 39), was given a backdated confirmation letter—though I have not accepted it to date for good moral reasons.

Perhaps I was chosen to be sent out with just a relieving letter because I had agitated and caused a break in the employer's unfair act. I had a few valid arguments to prove my point and bring the employer on the back foot, that is, receding from the demand of a full notice period/compensation. What more can the employer do to compromise on one hand while appearing strict on the other?

In line with your advice, I have tactfully exited the company (without paying/serving notice) to pursue a better opportunity elsewhere. Fighting a legal case was my last resort; had the issue not been settled amicably, I would have gone to labor court as I knew my stand was correct—also validated by you, now.

Please accept my sincere gratitude for sharing your views on this case.