Underperforming employees can cost your business money, but dismissing an employee without following the law can be even more costly!  Here are a couple of tips to use, and common pitfalls to avoid…

Pre-employment checks

In some industries it is common practice to be involved in several rounds of interviews, and a series of tests, as early investment in getting the right employee is well worth it. 

Smaller employers might not be in a position to afford extensive testing, but there are other ways of evaluating the suitability of a candidate.

Make sure you carefully read any candidate's CV or application form, and prepare questions for an interview that will allow you to get an accurate idea of their knowledge and skills. Don't simply assume that because the candidate was "involved in" a project, or "shared responsibility for" a task that they are able to do it unassisted. 

Ask them to demonstrate with examples what they have done in the past, and how they will contribute to your organisation. You should also evaluate the employee’s ability to fit into the organisation.  Consider things like cultural fit, communication skills, motivations, interests, and their ability to work with others.  Having all the skills is no good if the employee won't follow instructions, work well with others, or is disruptive to existing employees. It is also a good idea to verify what they tell you, with a reliable reference or background check. 

In some instances, it might be appropriate to ask a candidate to demonstrate their skills, by performing short unpaid tasks (like cook a meal, or greet customers).  It is crucial that the employee understands that he or she is not working, and that they have not been offered a job.  Rather they are still being "interviewed.  This part of the interview process must be reasonable, and you cannot disguise actual work as an interview.  If you need more time to evaluate the employee, a trial period may be more appropriate. 

Trial periods

Trial periods are a fantastic way to observe an employee in the actual work environment for a more extended period of time.  If it becomes apparent during the trial period that the employee is not suitable, the employer can give the employee notice (according to the employment agreement) that his or her employment will not continue after the trial period.  The employee cannot lodge a personal grievance for the dismissal.  The employee can however raise a personal grievance for being treated unfairly on other grounds (for example, harassment or unfair disadvantage).

A trial period can be for any length of time (but not longer than 90 days).  A trial period must be agreed to in writing before the employee starts working for an employer.  If the employee has worked for you for even just part of one day, or even in a completely different role, you cannot put them on a trial period. 

Probation periods

What about placing an existing employee into a new role but you are not sure if they are up to it?  How can you give those employees a chance to prove themselves, without getting stuck in an employment agreement that they cannot live up to?  As a pre-existing employee, you cannot put them into a trial provision, but you can agree to a probation period.

A probation period must be agreed to in writing by both the employer and the employee.  The probation can only be for as long as is necessary to ascertain the employee’s suitability.  The employer may also have obligations in terms of providing support and training, and being open and communicative about how the employee is performing. 

An employee on a probation period can lodge a personal grievance for unjustified dismissal so you must have a good reason to dismiss the employee, and you must follow a fair process in coming to that decision.

Casual employees

A casual employee is someone who has no expectation of continued work, and the employer has no expectation on the employee’s availability to work.  This type of arrangement works well if you need occasional extra staff, but cannot always predict when or for how long.  If you are not sure whether you have enough work for an employee, you should enter into a casual agreement.  If later it becomes apparent that you need a more permanent employee you can agree to a permanent arrangement, and you will already be familiar with the employee and their suitability.

A pitfall to avoid is when an initial casual arrangement gradually turns into a more regular arrangement.  Once the work become regular and the parties develop an expectation of continued work, the employment relationship is no longer casual, despite what is recorded in any agreement.  

Fixed term agreements

Fixed term agreements have a clear start and finish date.   If you have a big project, for which you need extra employees, but you cannot keep them on permanently after the completion of the project, a fixed term agreement might be ideal.  This is also a good way to cover for employees on long term leave (like maternity or sabbatical leave). There must be a genuine business reason for the fixed term and it has to be set out in writing for the employee. It cannot be used to assess suitability for a permanent position but if a genuine reason exists for the fixed term there is nothing to prevent an employer offering a permanent role in due course. An employer has no obligation to provide further employment after the agreement end date.

Alan Knowsley

Employment Lawyer