Termination of Employment of Probationary Employees

This article analyses the court precedents and rules that govern the employment of individuals during the probationary period. There is no law tha governs employment during probation, and thus, we must rely on the interpretation and rules set by the court to determine if a termination during probation is valid or not.

Fri Jun 03 2022 | Employment, Criminal and Labour | Comments (0)

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Probation period is a period of interim employment which is not permanent and the permanency of the employment of the employee by the employer depends upon certain factors. During this period, the employee is made to undergo a trial to test the skills, abilities and knowledge required to pursue the assigned job. Therefore, it can also be referred as ‘Assessment Period’.

Probationary employee is the employee who is on probation.

The Industrial Employment (Standing Orders) Act, 1946 defines probationers as a workman who is provisionally employed to fill a permanent vacancy in a post and has not completed three months’ service therein. If a permanent employee is employed as a probationer in a new post he may, at any time during the probationary period of three months, be reverted to his previous permanent post.

Probation period usually lasts for a period of six months to a year. The law has not prescribed or intimated  any maximum period.

NATURE OF PROBATIONARY EMPLOYMENT

Since the employment is conditional in case of probationary employees, the employer has the power to fire the probationary employees if the required conditions are not fulfilled. For example, if the employee depicts through his work that he is unable to carry the job efficiently then the employer can terminate his employment. However, this does not mean that employer can cease the employment merely based on his view that the performance of the said employee is unsatisfactory. There has to be a just and valid reason.

If the employer is unsuccessful in assessing the employee during the probation period then he can extend the period.

The contract of employment (or appointment letter) is the  most important document which, either expressly or impliedly, may provide the manner in which the confirmation will be communicated to the employee. All the other details related to the probation period needs to be stated clearly and unambiguously in the contract in order to avoid future disputes.

GROUNDS FOR TERMINATION OF PROBATIONARY EMPLOYEES

There is no specific statute or law available in India in order to regulate, control and manage the employment of probationary employees. However, we have a cornucopia of judgments that have clarified the grounds and rules that are to be followed for the termination of probationary employees.

Grounds for termination have to be just and reasonable and principles of natural justice need to be followed by the employer when required.

Most importantly, the termination order will be valid only if it is non-stigmatic.

Following case studies will help understand the legal position more clearly:

  • In the case of ‘Dayaram Dayal vs State Of M.P. And Anr [1997 Supp (3) SCR 624]’, the Hon’ble Supreme Court made an observation that “in some cases it was held that mere continuation of the period of probation does not amount to confirmation unless the contract of employment or any other such rule mentions the same, in others, it has been held that the continuation of probation period implies the confirmation.”

    The judgment showed that the rules (or contract signed) that were applicable to the probationary employee at the time of joining have to be followed where termination of the employee is concerned.

    Therefore, it is imperative to have a clear and unambiguous agreement in place.
  • A probationary employee can be terminated only through a non-stigmatic order.

    Stigmatic order disgraces the employee, in a way. So, an order of termination should be such that it does not defame the employee.

A related judgment is of ‘Chaitanya Prakash and Anr. Vs. H. Omkaraappa [(2010) 2 SCC 623]’. It was held that a termination offer which refers the services provided by the employee as unsatisfactory, cannot be said to be stigmatic. 

In another Judgment, the Supreme Court held that the expressions like "want of application", "lack of potential" and "found not dependable" when made in relation to the work of the employee would not be considered as stigmatic. - Allahabad Bank Officers Assn. vs. Allahabad Bank [(1996) 4 SCC 504]

  • ‘Unsatisfactory service’ is a ground for termination of the probationary employment. In Progressive Education Society v. Rajendra [(2008) 3 SCC 310], the Hon'ble Apex Court examined the correctness of the order passed by the School Tribunal quashing the termination of the service of an employee on the ground of unsatisfactory performance during the period of probation and observed that "The law with regard to termination of the services of a probationer is well established and it has been repeatedly held that such a power lies with the appointing authority which is at liberty to terminate the services of a probationer if it finds the performance of the probationer to be unsatisfactory during the period of probation. Unless a stigma is attached to the termination or the probationer is called upon to show cause for any shortcoming which may subsequently be the cause for termination of the probationer's service, the management or the appointing authority is not required to give any explanation or reason for terminating the services".
  • In order to determine whether an order of termination is simpliciter (in simple manner) or punitive (involving punishment), facts and circumstances of each case have to be considered. This was held in Mathew P. Thomas v. Kerala State Civil Supply Corpn. Ltd. [(2003) 3 SCC 263].
  • If a full scale formal enquiry into allegations involving moral turpitude or misconduct results in finding of guilt, then the termination order can be considered to be punitive. Such a termination order was upheld in Pavanendra Narayan Verma v. Sanjay Gandhi PGI of Medical Sciences (2002) 1 SCC 520.
  • Principles of natural justice need not be followed before the termination of services. The Delhi High Court in ‘The Managing Committee of Shiksha Bharati Senior Secondary Public School Vs. Director of Education and Anr. (2013)’ has held that “law with respect to termination of services of a probationer is now well-settled and has to be by a non-stigmatic order. However, it has been held that stating that the performance is not satisfactory or giving of facts in the termination order will not amount to the termination order being a stigmatic one. Also the principles of natural justice have not to be followed before termination of services of a probationer. If an enquiry is held and the enquiry report forms the foundation of termination of services of a probationer, only then, principles of natural justice are required to be followed, however, where the enquiry against a probationer is only for determining employee's suitability for continuing in service and the enquiry report only forms the motive for removal (as differentiated from a foundation for removal) then, a detailed enquiry in terms of the service rules is not necessary."

CONCLUSION

From the aforementioned  judgments and observations, it is coherent to say that an employer has the right to discharge a probationary employee on the grounds of ‘unsatisfactory services’. The termination order should be non-stigmatic in order to be valid. The termination order cannot be said to be stigmatic merely because the termination order has held the employee to be unsuitable for the job. If the facts mentioned in the termination were the only ones that were used to draw the conclusions then the order is justifiable and defensible.

If the order implies something other than the unsuitability for the job then the order can be called stigmatic.

It is not mandatory for an employer to follow the principles of natural justice even when the termination of the probationer is ordered on the ground of unsatisfactory service. 

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