In the world of employment contracts, probationary periods for new hires are common. They're often required by employment laws and serve to assess an employee's fit for a role. For more information on why is it important to include a probationary period in an employee's contract please refer to this helpful article.
However, clients sometimes want to remove this probation period. In this article, we explore the potential outcomes of such a decision.
Risks vs Benefits of Removing the Probation Period
Now, let's look at what might happen if you remove the probation period:
Higher Termination Costs: Without probation, employees may need longer notice periods, which could cost more. Keeping probation might save on these costs if applicable.
Longer Termination Timelines: Removing probation might lead to more extended, complex terminations, with longer notice periods or performance improvement plans.
Greater Dispute Risk: Terminating outside probation carries a higher risk of legal claims or disputes with the employee.
Considerations for Exceptional Circumstances
It's important to note that Omnipresent generally does not remove probationary period clauses from employment contracts, except in exceptional circumstances, such as when the employment relationship has been transferred to Omnipresent.
Furthermore, it's crucial to understand that being previously hired as a contractor does not qualify as an exception for removing probation clauses. The legal distinctions between contractors and employees persist, and changing the contracting scheme will subject the employee to labor laws and the inclusion of such clauses.
The Impact on Deposits
One important factor to keep in mind when contemplating the removal of a probation period is the potential need for an increased deposit. If the probation period is removed, and termination costs are expected to rise due to longer notice periods or more complex terminations, clients may be asked to provide a larger deposit to cover these increased costs.
This ensures that the necessary financial resources are in place to address any unforeseen challenges that may arise when ending an employment contract without the safety net of a probation period.
In Conclusion
Removing a probation period may seem tempting, but it's crucial to weigh the risks and benefits carefully. Keeping the probationary period can help minimize termination costs, make terminations more straightforward, and reduce legal risks.
However, in exceptional circumstances, such as when transferring the employment relationship to Omnipresent, clients may consider removing the probationary period. But remember, this decision should be made with a full understanding of the implications and potential deposit adjustments mentioned above.