written by | October 10, 2022

Probation Period - Legal Guidelines Applicable in India

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Table of Content


Probation in the dictionary means 'A process of testing or observing the character or abilities of a person new to a role or job'. During the probation period, employers test guide and prepare the employee for their appointed role. The probation period is given to new employees or joiners to understand the work culture better. This trial period usually lasts between 3 months to a year. And during this time, the manager or senior employee evaluates whether the candidate is the right fit for the organisation or not.    

Did you know? Probation period served in any company is considered as work experience.

Also read: LIC AAO Salary Structure, Job Profile, and Allowances

What is the Probation Period?

An employee on probation is utterly different from a regular employee working with the organization, and they are not covered under the indiscriminate termination of employment or termination benefits.

While the employer entirely regulates an employee's probation period, sometimes beacuse of any discrepanices it may land your company in legal procedures.

The probation period varies with the job profile, industry, and other factors. In some cases, even permanent workers may also be subjected to probation due to the following reasons - 

  • If the permanent employee is promoted to some higher post that requires prior training and guidance. 
  • If the current employee cannot match the company's expectations with their recent work performance. 

Permanent Employee Vs Probationer. 

A permanent workman or employee is entitled to many benefits the company offers exclusively to their employees. Only permanent employees can avail of the benefits under the standing orders of the Industrial Employment Act, 1946.

Probationers often have to handle stress and pressure at work as their jobs are at stake, and any mistakes can result in the downfall of their professional careers. As in most cases, probationers are new hires, and working during probation lowers their morale and self-confidence. 

On the other hand, permanent employees don't have to stress much about their job as they are already settled and have to focus on their current performance. 

When permanent employees are dismissed from their jobs, they receive a service certificate which becomes an important part of their employment portfolio. At the same time, a probationer is not entitled to receive a service certificate after they are terminated from their services before the completion of the probation period.

Probation in India 

The only law in India that deals with probation is the Industrial Employment Standing Order Act, 1946, which applies to any organization or company with at least 100 active permanent employees at any point in time. Here' permanent employee' is the important term. According to this act, a permanent workman is "The person who has completed at least 3-months of the probationary period and is engaged in the company permanently in the occupation of industrial establishment".  

Many states have incorporated the term probation directly or indirectly in their state laws which say that ideally, a probation period should not be more than eight months as a person working for such a long period qualifies as a permanent workman.

Rules and Regulations Regarding Probation Period.

The status of a probation employee has been cleared with the help of many judicial cases. Even if employees are not entitled to the benefits of a regular employee, specific rules must be followed by the employee and the employer. 

Here are the set of rules or guidelines laid down by the law regarding Probation period in India.

  • As a probationer, you must give prior notice before terminating your services before the probation period ends, or you may have to face legal consequences. During the probation period, the probationer might have to pass some tests, undergo specific training courses if demanded by the job profile or obtain confirmation from the authority.
  • The probation period could not exceed more than two months. However, it can be extended to a maximum of 4 months if the agreement between the company and the employee is inconsistent according to the Standing orders for a company satisfying conditions in Industrial Employement Atanding Orders Act, 1946. It was made clear by the Hon'ble Supreme court in a reccent case of Western India Match Company Ltd vs employees. 
  • In exceptional cases, the probational period shall not exceed a year; under no conditions should the employee be kept on a probation period more than double the normal period.

However, in certain states, the probationary period can be up to 240 days or eight months.  

  • In simple words, the points in the agreement which do not obey the Standing orders of the act should be rejected and shall not be enforced on the employee. According to the Standing orders, the terms in the agreement should prevail.
  • A probationer is not considered a workman and the service of a probationer can be ended by the employer with or without any prior notice and such termination doesn't amount to curtailment under the Sub-section (oo) of the Intdustrial disputes act, Section (2). 

This rule was laid down by the Delhi High Court during a recent case between Deccan Charters PVT LTD Vs A probationer working in the company. This

  • Any agreement point or term or condition cannot override the Standing orders in the Industrial Employement Act, 1946. 

For example, The Allahabad High Court has given a similar decision in the case of Srivastava and Anr. Vs Banaras Electric light and power.

  • The power of termination of services of a probationer entirely lies with the appointing authority. The authority has the right to terminate the services of the probationer if they find the performance unsatisfactory or unacceptable behaviour and are not required to present any explanation or reason for ending the services.
  • A probationer working in the company cannot be considered as a permanent employee at the end of probation period automatically unless the company provides an official confirmation. There is no automatic confirmation unless explicitly mentioned in the rules of the agreement.

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Even if the probationer is working after the completion of probation period, he/she will not be considered as permanent employee in the company until the company clarifies or offers a confirmation/appointment letter. 

A similar decision was passed by The Hon’ble Supreme Court of India in the case of Lawerence School Vs Jayanthi Raghu.

Considering all the above guidelines, it is safe to say that nothing can prevail above the law, i.e. the standing orders, be it the pre-mentioned terms and conditions of the appointment letter. 

What Happens After the Completion of the Probation Period?

After the probationer has completed the probation period, three situations may arise,  

  • The probation period can be extended (not more than double the normal probation period).
  • The probationer can be offered a confirmation letter from the appointing authority and can be asked to continue their services as a permanent employee of the company.
  • The services can be terminated anytime, and the probationer shall be dismissed from the company. 

Permanent Employment 

After completing the probation period with satisfactory performance, companies offer a confirmation letter to the probationer, appointing them as permanent employees for the company. It can be considered a promotion for the probationer, which ensures better job security and employee benefits.

Once you have obtained a permanent post in the company, you are entitled to many benefits like an increment in salary and many other employee benefits offered by the company exclusively to their permanent employees. 

Extension of Employment Probation Period. 

If the company decides to extend the probation period, they need your consent. 

Extension of the probation period is provided in specific scenarios like - 

  • If the earlier proposed time period was not enough to evaluate your performance.
  • If certain changes in a job profile demand further training and observation.
  • If the authority wants to offer you an assignment before providing a confirmation letter. 

However, the extension of the probation period is a rare case. 

Termination of Employment 

If the company is unsatisfied with the probationer's performance during the probation period, the appointing authority has the liberty to terminate its services without any prior notice. This flexibility is available for the probationer as well. If the probationer finds a better job opportunity, they can also terminate their services with short notice during the probation period or leave the company after completing the probation period. 

Also read: Know About the RBI Assistant Salary Structure and Job Profile

Conclusion 

Working on a probation period has its benefits and some downsides. At the same time, probation allows an employer to test the skills and train them for their new job profile before hiring them as permanent company employees. 

But in some cases, misusing the probation period to exploit the employee can lead the companies to court. Companies that want to implement a probation period need to obey the standing orders of the Industrial Employment Act, 1946, and no term or condition in the agreement can prevail over these standing orders. 

Though there aren't many strict laws in India on the Probation Period or laws that clarify the status of a probationer, the judgments passed by the Supreme Court and High Courts in some instances and several case studies have helped us to describe the status and their rights, the time of probation period, etc. 
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FAQs

Q: Is the probation period counted as work experience?

Ans:

Yes, the probation period is counted as working experience.

Q: What are the advantages of the probation period?

Ans:

The probation period lets the employee and employer know their working relationship and helps to retain any new possibilities if things don't turn good.

Q: What happens after the probation period?

Ans:

After the probation period, if the employer likes the work, then the employee gets hired and secures a permanent job in the firm.

Q: Is salary given in the probation period?

Ans:

The employee serving in probation period is liable to get a salary according to the norms.

Q: What is the duration of the probation period?

Ans:

The probation period usually ranges from 3 months to 6 months.

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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.