Dismissing Employees During Probation

Probation periods are widely used by employers as a practical tool for assessing new hires. When an employee under probation doesn’t meet expectations, the decision to dismiss can feel relatively straightforward — particularly given the perception that legal risk is minimal during the early months of employment. However, this assumption can lead to costly mistakes.

In reality, probationary dismissals can still result in claims for discrimination, breach of contract, or wrongful dismissal. While employees do not usually qualify for ordinary unfair dismissal protection until they have two years of continuous service, many statutory rights apply from day one. Mishandling a probationary dismissal — whether through poor process, lack of documentation, or failure to consider legal obligations — can create unnecessary risk for employers.

This article explores the legal framework around probationary dismissals, key risks to be aware of, and practical steps for employers to manage dismissals during probation lawfully and fairly.

 

Understanding the Legal Framework

 

A probation period is a contractual arrangement that allows an employer to assess an employee’s suitability for their role over a defined timeframe. However, it does not override an employee’s statutory rights. From the first day of employment, probationary employees are protected under the Equality Act 2010, entitled to minimum notice under the Employment Rights Act 1996, and shielded from certain types of automatic unfair dismissal.

Critically, probation periods do not entitle employers to terminate employment without consequence. Even during probation, dismissals must be handled with care, fairness, and legal compliance.

 

Common Legal Risks During Probation

 

Discrimination Claims

The most significant legal risk during probation is discrimination. Under UK law, employees are protected from discrimination based on protected characteristics — including disability, sex, race, religion, pregnancy, age, and more — from their very first day of employment. If a dismissal appears to be linked to any of these characteristics, even indirectly, employers could face a claim.

For example, if an employee discloses a mental health condition during probation and is subsequently dismissed without consideration of reasonable adjustments, a tribunal may view that as disability discrimination. Compensation for such claims is uncapped, and the reputational fallout can be severe.

 

Automatically Unfair Dismissals

Certain dismissals are considered automatically unfair, regardless of the employee’s length of service. These include dismissals connected to whistleblowing, health and safety activity, pregnancy or maternity, and the exercise of statutory rights. Employers must not assume that short-service employees are “safe to dismiss” if these issues are in play.

 

Wrongful Dismissal

Wrongful dismissal occurs when an employer breaches the employment contract — typically by failing to give the agreed notice or pay in lieu of notice. Even during probation, if an employee’s contract provides for a one-week notice period, terminating employment without that notice — unless due to gross misconduct — can lead to a claim. Employers must always adhere to contractual and statutory notice periods.

 

Breach of Contract and Constructive Dismissal

In some cases, mishandling the probation process itself can constitute a breach of the implied duty of mutual trust and confidence. If an employee feels they have been treated unfairly or harassed during probation, they may resign and attempt to bring a constructive dismissal claim. While rare during probation due to service requirements, these claims can still arise, especially where protected characteristics or serious procedural failings are involved.

 

Lessons from Recent Case Law

 

Two recent tribunal decisions offer valuable insight into the risks of dismissing employees during probation.

 

In Royal Surrey County NHS Foundation Trust v Drzymala (2018), a probationary doctor was dismissed without explanation, despite positive appraisals. The Employment Appeal Tribunal warned against dismissals that appear arbitrary or poorly justified. While the employee lacked the two years’ service to claim ordinary unfair dismissal, the reputational harm and risk of other claims served as a warning: employers must treat probationers with procedural fairness and document their reasoning clearly.

 

In Pnaiser v NHS England (2016), a job offer was withdrawn after a reference disclosed the candidate’s past disability-related absence. The Court of Appeal found this amounted to direct disability discrimination. The case underscores the importance of avoiding any link between dismissal decisions and disability or sickness absence — even during probation.

 

Best Practices for Lawful Probationary Dismissals

 

To manage dismissals during probation lawfully and defensibly, employers should implement the following practices:

 

Set Expectations Early

At the outset, provide a clear job description and explain what success during probation looks like. Share measurable objectives and outline the structure of the probation review process, including when feedback will be given. Employees should understand what they are being assessed against.

 

Schedule Regular Reviews

Don’t wait until the final week of probation to assess performance. Schedule formal reviews midway and at the end, and document discussions throughout. These meetings should highlight achievements, flag any concerns, and give the employee time to improve. Well-documented reviews are a crucial defence if a claim is brought.

 

Offer Support and Fair Warning

If performance issues arise, communicate them early and clearly. Offer reasonable support — such as coaching or mentoring — and give the employee a fair chance to improve. Surprising an employee with dismissal at the end of probation, without prior warning or discussion, increases the risk of legal challenge.

 

Consider Reasonable Adjustments

If an employee has a disability or underlying health issue, explore whether adjustments could improve their performance. This might involve modified duties, altered hours, or additional support. Failing to engage in this dialogue or disregarding adjustment needs may breach the Equality Act.

 

Follow Notice Requirements

Check the employment contract for any notice obligations. If the contract allows termination on one week’s notice after one month of service (the statutory minimum), that must be honoured — either as worked notice or paid in lieu. Employers that skip this step risk wrongful dismissal claims.

 

Conduct a Fair Dismissal Process

Even for short-service employees, it is best practice to hold a final review meeting, give the employee an opportunity to respond to concerns, and confirm the dismissal and reasoning in writing. While a right of appeal isn’t legally required, offering one helps demonstrate fairness and mitigate legal risk.

 

Train Line Managers

Managers overseeing probation reviews should be trained in legal requirements, fair assessment practices, and how to document key decisions. Many disputes arise not from malicious intent, but from inconsistent or poorly executed processes by line managers.

 

Probation Extensions: Handle with Care

 

If an employee has shown potential but hasn’t fully met expectations, extending the probation period may be a better option than dismissal. However, this must be handled properly.

First, check that the contract allows for an extension. Then, communicate the extension in writing before the original period ends, explaining the reasons and setting clear goals for the extended timeframe. Probation extensions must never be used to delay decisions unfairly or to avoid addressing underlying bias or discrimination.

 

Avoiding Common Mistakes

 

Many probation-related claims stem from avoidable errors. Employers should not assume that probationary status removes all legal duties. Common missteps include failing to give proper notice, ignoring health disclosures, relying on vague reasons for dismissal, or neglecting to document key conversations.

Employers should also be mindful of internal perceptions. A pattern of probationary dismissals — particularly among underrepresented groups — can quickly undermine the employer’s reputation and expose systemic bias in hiring or management practices.

 

Conclusion

 

While probation periods offer employers an important window to assess new hires, they must be managed with care. Dismissing employees during probation is not risk-free — especially when it comes to discrimination, contractual obligations, and fair process.

By setting clear expectations, offering structured support, complying with legal duties, and documenting each step, employers can mitigate legal risk and uphold their reputation as fair and responsible organisations. A thoughtful, transparent approach to probation doesn’t just protect the business — it also helps unlock the full potential of new talent, fostering long-term success.