We often hear the phrase ‘Hooray! I’ve passed probation.’ The term ‘probation’ in this article comes from the word ‘Probation’ or ‘Probationary Period,’ which refers to a trial period or an on-the-job tryout for new employees to demonstrate their skills and suitability for a particular role.
A probation period is a designated timeframe during which an employer assesses an employee’s knowledge, abilities, and job performance to determine if they meet the specified standards before confirming their permanent employment status.
According to the law, there are no strict regulations regarding the duration of probation periods. Employers have the discretion to set the length of the probation period, which can be agreed upon either before the employee starts working or after they have commenced. However, in practice, it’s advisable to establish the terms before the first day of work.
If there’s no prior agreement, employers can extend the probation period without advance notice. If an employee has been on probation for more than 120 days and the employer decides to terminate their employment without any wrongdoing, the employer is required to provide severance pay, just like regular employees, as per Article 118 of the Labor Protection Act.
Probation Period Duration
The probation period’s duration is typically set at 120 days, with only a minority of cases having a 180-day probation period. This discrepancy is mainly due to the Thai Labor Protection Act, Section 118(1), which states that employers must pay severance to employees who have worked for a period of at least 120 days but less than 1 year, at a rate not less than the final wage for 30 days. Consequently, many employers choose to terminate employment just before the completion of the 120-day period to avoid potential issues or disputes arising from the employee’s completion of 120 days of work. If an employer terminates an employee on or after the 120th day without any wrongdoing, they are required to provide severance pay, similar to regular employees, as per Section 119 of the Act.
There are several misconceptions and misunderstandings regarding probation periods, especially concerning the misconception that employees during probation are considered temporary workers. In reality, under the law, probationary employees have the same status as regular employees who have been officially hired and are entitled to benefits and legal protection from the first day of work. For example, if a probationary employee falls ill on their second day of work, they have the right to receive sick leave pay just like a regular employee, regardless of whether they were hired on a daily, hourly, or monthly basis.
During the 120-day probation period, employers should conduct at least two formal performance evaluations (in practice, ongoing monitoring, communication, and assessment are recommended):
- First Evaluation: This initial evaluation, often referred to as ‘Placement Follow-Up,’ may occur within the first 45 or 60 days of employment. It is a critical review of the employee’s progress and suitability for the role.
- Second Evaluation: Another evaluation should take place when the employee has completed 100 days of work. This allows for thorough consideration during the remaining 19 days to decide whether to confirm the employee’s permanent status or terminate their probationary employment.
When evaluating a probationary period, it’s advisable to proceed gradually and not wait until the last day. For employers dealing with a significant number of probationary employees, who may approach the HR department on the exact 120th day, it’s crucial to avoid last-minute assessments, as this can pose significant legal risks. Some processes might take more than one day to complete, potentially exceeding the 120-day probation period and necessitating severance pay.
What a Company Should Do When an Employee Does Not Pass the Probationary Period
+ Provide Clear and Direct Feedback
If an employee does not meet the criteria during the probationary period, what the Human Resources (HR) department should do is call the employee in to explain the true reasons, especially in terms of the Job Description (JD) as well as the competencies required for the job, which directly affect the job evaluation. This is done to ensure mutual understanding between both parties and to prevent potential legal disputes in case of unfair treatment and failure to communicate the facts.
+ Recruitment of New Personnel
To ensure a timely replacement, the recruitment of new personnel can begin by considering current employees within the company who may be interested in and suitable for the new position. Alternatively, recruitment can also involve reevaluating previous applicants from the candidate pool if no suitable candidates have been identified. If a truly suitable candidate has not yet been found, the recruitment process may need to be initiated once again.
+ Ensuring Legal Compliance
Terminating the employment of any individual, including those in a probationary period, requires careful consideration of legal compliance. In the first instance, it may be necessary to promptly check whether the termination falls within the scope of a 120-day probationary period. If the termination occurs beyond this timeframe, the company may be required to provide compensation to prevent potential legal action. Additionally, it’s crucial to consider any other relevant laws and whether various legal documents may have implications in the future.
Legal Considerations and Compensation
Probationary employment is not governed by labor laws, so whether a company has such a system or not doesn’t violate any labor laws. When a company decides to employ an individual, even if they are in a probationary period, under the law, that individual has the same rights as regular employees who have been formally hired. Labor laws provide details to protect employees in such cases.
For probationary employees, companies may pay extra attention to legal details, especially those outlined in Section 118 of the Labor Protection Act, which states that an employer must pay compensation to an employee who is terminated after working continuously for 120 days but less than 1 year. This compensation must be no less than 30 days’ salary. In simpler terms, if an employee works continuously for 120 days and the company decides to terminate their employment, they must be compensated with one month’s salary. This period generally corresponds to the probationary period for most employees.
Recommendations for Organizations Regarding Probationary Period Duration
Set the probationary period to be less than 120 days.
If possible, companies should clearly define the probationary period to communicate it to new employees from the outset. It should ideally be less than 120 days. Alternatively, if a 120-day probationary period is necessary, provide clear notification before the deadline (at least one day in advance). In this case, if the company decides not to hire the employee due to any inadequacies or if they do not pass the probationary period, there may not be a need to pay an additional one-month compensation. Many companies that overlook this legal detail often allow the probationary period to exceed 120 days or discuss the matter on the very last day, which is the 120th day. This can lead to delays in various processes and the inability to complete them within the designated 120-day period. In such cases, employees have the right to claim compensation according to labor protection laws.
Neglecting the law, companies may end up paying more than they bargained for
If we delve into the details, companies may incur more significant losses than anticipated when abruptly terminating an employee’s contract after they have worked for a full 120 days or more. In such a case, the company may be required to compensate the employee for a total of 2 months. The first part of this compensation (1 month) is the termination notice pay, while the second part (1 month) is for damages resulting from not providing advance notice (typically, termination notice should be given at least 1 month in advance).
Abruptly notifying termination can lead to detrimental consequences for the employee, and labor laws provide protection in this regard. Therefore, it is advisable for companies to take this matter seriously and consider completing terminations well before the 120-day probationary period concludes.
A 90-day probationary period is a common standard used by many organizations.
Typically, to prevent potential errors and ensure fairness for both employers and employees, organizations often set the probationary period at 90 days, which is approximately 3 months. This duration is generally considered adequate for assessing competency and performance without causing undue stress that may impact compensation considerations. It also provides sufficient time for administrative tasks and documentation to be completed effectively.
Provide Appropriate Feedback and Prepare for Out-of-Ordinary Agreements.
What organizations should prioritize the most when notifying employees about the results of their probationary period is to treat them with respect and dignity. It’s important to choose a private setting for discussions, such as a meeting room without other parties involved. In cases where the employee does not pass the probationary period, provide clear and honest feedback based on factual reasons. Use appropriate language, avoiding derogatory or belittling remarks, and instead, focus on providing encouragement and suggestions for improvement to pave the way for future success.
Typically, if an employee doesn’t pass the probationary period, they may request to resign or terminate their role with the company immediately. However, there might be instances where they wish to negotiate and continue working for a while until they secure a new job. In such cases, the company can consider this out-of-ordinary request but must ensure it doesn’t exceed the 120-day limit as mandated by labor laws. Additionally, all aspects of the agreement, including the duration and compensation, should be discussed thoroughly.
What should be done regarding employment certification documents.
Another scenario that may arise is when an employee who didn’t pass the probationary period requests a work certification letter from the company. In this case, the company should directly inform the employee that providing such a certificate may have consequences for their work history. However, if the employee insists on requesting the certificate, the company should issue it truthfully, including stating the reasons why the employee didn’t meet the probationary criteria. Avoiding the truth may lead to potential negative consequences for the company in the future.
Salary Adjustment After Probationary Period
Before commencing the probationary period, most companies negotiate the salary rate upfront, and often, there’s a specific agreement in place regarding a salary increase after successfully completing the probationary period and being formally employed. HR departments should be acutely aware of whether such negotiations took place and should adhere to the terms of the agreement.
In such cases, HR may evaluate based on performance or potential demonstrated during the probationary period whether a salary adjustment is warranted. However, it’s crucial to provide clear communication regarding the salary summary after the employment contract is finalized.
Special Thanks : https://th.hrnote.asia/recruit/th-190115-trialperiod/