Hiring a new employee is an exciting period for businesses. It represents growth, expansion in operations and financial improvements. The process of hiring is quite straightforward: from identifying the need for a hire, the interview process, selecting the right candidate, to hiring the preferred person.
Small businesses looking to hire a new employee need to know the labour laws of South Africa, which are governed by the Basic Conditions of Employment Act (BCEA). These laws outline all the rights and responsibilities for both employers and employees.
However, the laws that govern probation periods are slightly different. In South Africa, probation periods are governed by the Labour Relations Act 66 of 1995 (LRA), specifically the Code of Good Practice: Dismissal (Schedule 8), alongside basic parameters from the BCEA.
In this article, we look at what probation periods are, what the Act says about them and how employers can go about implementing them.
What is a Probation Period?
A probation period is an initial trial phase at the start of a new job, typically lasting three to six months. It allows employers to evaluate your skills, behaviour, and cultural fit, while giving you the chance to decide if the role and company culture meet your expectations.
Types of Probation Periods
Different roles require different types of trial periods. For example, a senior executive might need more time to prove their value than a seasonal labourer. The following are some of the different types of probation periods:
- Standard trial: These are typically three months (90 days) and are best for office and admin roles.
- Short trial: Typically a one-month probationary period. Most companies use one-month trials for seasonal or temporary workers.
- Extended trial: This one is usually six months or longer. Most common for high-level executive roles.
- Project-Based trial: The probation ends when the project/task is done and requires a very clear scope of work. Companies use this timeline for external hires such as consultants or developers.
It’s important to note that by law, probation periods only apply to new hires. Promoted employees do not have to be put under probation.
What Probation Regulations Say
Probation is dealt with in terms of the Code of Good Practice: Dismissal, contained in Schedule 8 to the Labour Relations Act. This document states as follows:
1) Newly hired employees may be placed on probation for a period that is reasonable given the circumstances of the job. The period should be determined by the nature of the job, and the time it takes to determine the employee’s suitability for continued employment.
2) There are no laws that indicate that a new employee must be employed on probation; that is for the employer to decide. The code states employees can be hired without a probationary period, and the employer must give an employee whatever evaluation, instruction, training, guidance or counselling the employee requires to render satisfactory service.
3) Dismissal during a probation period must be preceded by an opportunity for the employee to state a case in response and to be assisted by a trade union representative or fellow employee.
4) After probation, an employer cannot dismiss an employee for unsatisfactory performance unless the employer has given the employee appropriate evaluation, instruction, training, guidance or counselling, and after a reasonable period of time for improvement, the employee continues to perform unsatisfactorily.
5) The procedure leading to dismissal should include an investigation to establish the reasons for the unsatisfactory performance, and the employer should consider other ways, short of dismissal, to remedy the matter.
6) Should the employee refer a dispute of unfair dismissal to the CCMA, the employer would be required to show, by documentary proof, that he has complied with all the above requirements stipulated in The Code of Good Practice: Dismissal.
Employer Legal Duties During Probation
During a probation period, an employer must:
- Define clear performance standards upfront
- Monitor and evaluate the new employee’s work
- Provide regular feedback, guidance or training where necessary
- Allow for reasonable time for improvement
- Engage in consultation before considering dismissal
Failing to meet these duties may result in a finding of unfair dismissal even if the employee is still within their probation period.
Common Employer Mistakes During Probation Periods
The following are examples of dismissal during probation periods that can be considered unlawful.
- Dismissing an employee without giving them a chance to improve.
- Using probation as a pretext for poor hiring decisions or personality clashes.
- Failing to document performance discussions or improvement plans.
- Not allowing sufficient time or support to assess the new employee’s capabilities.
If dismissal is found to be procedurally or substantively unfair, the employee may be awarded up to 12 months’ remuneration as compensation. In some cases (e.g. discriminatory or automatically unfair dismissal), this may rise to 24 months’ remuneration.
Why Probation Periods Matter
Probation periods are critical for businesses because they act as a financial and legal shield for the entire business. Additionally, probation periods drive operational efficiency. They force managers to provide feedback early and consistently, consequently helping new hires learn their roles faster.
Also, the clarity provided during probation periods, as well as training and guidance, prevents new hires from being confused and prevents early resignation. Therefore, a solid probation contract protects your bottom line (because new hires are expensive) and your company culture.
Implementing a Probation Period
Use the following steps as a guideline to implement a probation period within your business.
Step 1: Draft an Agreement
Use a clear probationary period of employment clause in your contract. You should include these items in your initial offer letter or employment agreement:
- Duration: The contract must state the exact length of the probation.
- Performance goals: Explicitly define exactly what success looks like for the new employee.
- Notice period: Explain how much notice each party – employer and employee – must give to end the contract early.
- Benefit eligibility: List which perks start on day one and which start after the trial period ends.
- Extension clauses: Reserve the right to add more time if you need more data on the employee.
- Review dates: Set specific milestones for check-ins and the final evaluation meeting.
Step 2: Set Clear Milestones
It’s very important that you write down the specific goals you require your new employee to reach within their first 30-60 days. Use measurable metrics like “write 10 new articles” to be able to track performance.
Step 3: Issue the Letter of Probation
You must provide a formal letter of probation to your new employee on their first day of employment. For legal reasons, you must keep a signed copy of the letter in your digital files.
Step 4: Conduct Regular Check-ins
Meet every two weeks to discuss your new hire’s progress. When conducting these meetings, ensure you document every one of them to show a pattern of poor performance later if the employee must be dismissed.
Failure to do this will result in your business being accused of unfair dismissal and can lead to you paying the former employee or having to reinstate them.
Step 5: Final Reviews
Hold a meeting with your new employee at least a week before their trial period ends. During this meeting, you must clearly state if they have passed or if you are extending their probation time.
By following regulations and your internal policies on new hires, you can provide a meaningful probation period for new employees, which will make them the ultimate asset to your business. Failure to do so will result in some hefty financial penalties for you.
