Termination during the probationary period – What should the employer keep in mind?

Although there is constant talk in the mass media about labor shortages and the increase in the number of vacancies, it is not uncommon to realize in the early stages of the employment relationship that the recruited employee is not suited for the job after all.

It is possible for an employer to terminate the employment contract during the probationary period, but there are some nuances to pay attention to.

Choose the right basis to terminate your employment

The purpose of the probationary period is to enable the employer to assess whether the employee’s health, knowledge, skills, abilities, and personal qualities correspond to the level required for the job. If this turns out not to be the case, the employer can cancel the employment contract.

However, the employer must make sure that the reason for terminating the employment contract is in line with the purpose of the probationary period. Thus, if there are other grounds for terminating the employment contract, the employment contract cannot be terminated on the basis of the regulation on termination of the employment contract during the probationary period.

If the employment contract is terminated on the basis of the regulations of the probationary period for a reason contrary to the purpose of the probationary period, the termination is void and the employee has the prospect of successfully contesting the termination.

Cancellation must be justified

In addition to the fact that the employer can only terminate the employment contract on certain grounds, the employer must also justify the termination of the employment contract.

This is not only specific to the termination of an employment contract during the probationary period but applies in any case if the employer wishes to terminate the employment contract. The justification should be thorough and illustrated with specific facts and examples.

The level of detail and clarity of the reasons and the existence of relevant evidence help to reduce the risk that the employee will successfully challenge the cancellation before the labor dispute committee.

Cancellation is easier

During the probationary period, the termination of the employment contract is faster. If, in general, the term for ordinary termination of an employment contract is 30 calendar days and this option is available only to the employee, then during the probation period both the employee and the employer may terminate the employment contract with 15 calendar days’ notice.

Here, attention must be paid to the fact that with 15 calendar days’ notice, it is possible to terminate the employment contract on the last day of the probationary period.

However, it must be borne in mind that the employment contract does not expire on the last day of the probationary period, but after 15 calendar days.

If the employer wishes to terminate the employment contract without observing the notice period, the employee has the right to receive compensation to the extent to which he or she would have been entitled to upon adhering to the term for advance notice.

If a non-competition clause which survives the termination of the employment relationship, has been agreed upon, then such an agreement does not automatically terminate upon termination of the employment contract. If the employer does not wish to apply the non-compete, he can cancel it at any time with 30 calendar days’ notice.

The corresponding express declaration may be included either in the declaration of cancellation of the employment contract or in a separate document. If the restriction of competition is not canceled, the employee is obliged to comply with it and the employer is obliged to compensate the employee for complying with the restriction.

Thus, when terminating an employment contract, it is important to also consider whether there is a need for the continuation of the restriction of competition.

The advice to the employer in case it turns out that the employee is not suitable for the job is not to delay the termination of the employment contract, but to use the opportunity to terminate the employment contract during the probationary period following the simplified procedure.

After the end of the probationary period, it is much more difficult for the employer to get rid of the employee with unsuitable skills.

Get the latest about Hedman law firm

Hedman

Our memberships:
FinanceEstonia, Lexing®,
Estonian Service Industry Association,
Estonian Chamber of Commerce and Industry,
EstVCA, EstBan, FECC,
IBA & IBA European regional Forum