Key issues in probation contracts

PROBATION contracts have caused confusion in the past. This week I want to pick out some key issues that arise from probation contracts. We are going to look at three pertinent areas that speak to probation contracts. These are:

1. The purpose of a period of probation.

2. Whether s 12 (5) of the Labour Act permits an extension of a period of probation.

3. The status of an employee who continues to work after the probationary period has elapsed.

The issues above often speak to what many businesses are confronted with.

(1) The purpose of a period of probation

The main reason for having a period of probation is to give an employer an opportunity to evaluate a “potential” employee before opting to accept him or her as a full time employee. During this period the employee is assessed and evaluated to determine his or her suitability for permanent employment. Professor Lovemore Madhuku in his book “Labour Law in Zimbabwe” at page 44 states as follows with regards to the purpose of probation:

“A probationary employee is one who is in the initial period of his or her employment where his skill and abilities are being assessed. The probationary employment contract is separate from the second employment contract, which is conditional on successfully completing the probation ....”

CHINHENGO J (as he then was) in Madawo v Interfresh Limited 2000 (1) ZLR 660 at 882 remarked as follows:

“Probation is defined in the New English Dictionary as “The action or process of testing or putting to the proof ... the testing or trial of a person’s conduct, character or moral qualification; a proceeding designed to ascertain these . . . for some position or office. I think these words very well describe the process of probation as commonly undergone by accepted candidates ....”

NDOU J in the case of Commercial Bank of Zimbabwe v Kwangwari HH79/2003 expressed probation as follows:

“Probationary clauses provide for a trial period during which the reciprocal periods of notice required for termination are shorter, and which purportedly give both parties the right either to confirm or not to confirm the contract at the conclusion of the probationary period”

There are three things that arise from the thoughts shared earlier. These are;

The employee must successfully complete the period of probation before he or she can be permanently employed.

The probationary period is a separate and distinct contract.

The contract of permanent employment only comes into operation once an employee has successfully completed the period of probation and finally, it is reciprocal in nature. What this means is that if an employee is dissatisfied with the employer he may also terminate the employment by giving the requisite notice. The notice periods are governed in terms of the Labour Act.

A Case Study

St. Giles Medical Rehabilitation Centre “St. Giles” engaged one Patsanza “the employee” as a Finance and Administration Manager. The contract was subject to a three months’ probationary period. The period of probation was effective from February 28, 2012 and was to end in May 2012. On May 31, 2012 Patsanza was advised that his position was not going to be confirmed as his evaluation had not been satisfactory.

Instead of terminating the contract, St. Giles decided however to extend the probation period by one month. This was in an attempt to allow the employee to remedy the inconsistencies which had been noted by the employer during his evaluation which had taken place at the beginning of May 2012.

Patsanza refused to accept an extension of the period of probation, arguing that he had successfully completed the accounts for 2011 and that he had subsequently been issued with a company car. It was his argument that the issuance of the company car confirmed that he was now a permanent employee. In spite of his protestations, Patsanza continued to work for the duration of the extension.

On July 21, 2012 St. Giles wrote to the employee advising him again that his probationary period had not been successful and gave him two weeks’ notice to terminate his services. Patsanza declined to accept the two-week period of notice and argued that the termination amounted to an unfair dismissal. He argued that as a “permanent employee” he was entitled to three months’ notice of the termination of his employment.

The parties were unable to resolve the dispute, and the matter was consequently referred to an Arbitrator who found that the extension of the probationary period was unlawful. St. Giles was

St. Giles was dissatisfied with the award and approached the Labour Court seeking the setting aside of that determination and the confirmation of the termination of the employee’s employment. The appeal was opposed. The Labour Court upheld the Arbitrator’s award and dismissed the appeal. St. Giles noted an appeal to the Supreme Court against the decision of the court a quo.

The other two issues come into play at this stage. Let us look into the law on these particular points.

(2) Whether the Labour Act permits an extension of a period of probation

Section 12(5) of the Labour Act [Chapter 9:16] regulates issues of probation in the workplace. The section reads as follows: “A contract of employment may provide in writing for a single, non-renewable probationary period . . .” This provision is clear and does not need any interpretation. The provision provides that where an employer decides to include a probationary period in the contract of employment then that period is not renewable.

The Labour Court correctly found that the use of the word “may” in the above section relates to the employer’s discretion to engage an employee either on probation or immediately into a substantive position. Once a probationary period is given by an employer then it can only be a “single, non-renewable” period. In this regard Professor Madhuku states: “This means that at the end of a probationary period the employer has two choices: either allow the probationary contract to lapse and let the employee go, or enter into a second employment contract with the employee. There is no room for renewal of the probationary contract.” (emphasis added)

This position was also set out in the case of Kazembe v the Adult Literacy Organisation SC 173/1994, where the court stated that once a probation period ends and the employer is dissatisfied with the probationer’s performance, all that the employer needs to do is to inform him that his services are no longer required and that would be the end of the matter.

There are two ways in which an unsuccessful probationary employee can be dismissed. The first is to allow the probation period to expire naturally wherein the employee is released at the end of that period. The second is to release the probationary employee before the end of the probation period. Where the probationary period is cut short then the issue of notice arises and he must be given notice in terms of the contract. (see Time Bank of Zimbabwe v Nkosana Moyo HH26/02.)

There is therefore no legal scope for extension of the probationary period. In Kwangwari v Commercial Bank of Zimbabwe (supra) the court allowed the employer the discretion to extend a probationary period without the employee assuming substantive appointment to a permanent position. What is apparent is that at the time that NDOU J dealt with the Kwangwari case, s12(5) of the Labour Act had not come into operation. This case came before the High Court in 2002. Section 12(5) of the Act was only enacted by amendment 17/2002 which was published and came into operation on 7 March 2003.

In the St. Giles matter the employer committed two errors,

◆ It erred in extending the period of probation.

◆ It also erred in dismissing the employee on two weeks’ notice which was not provided for in the contract of employment.

(3) What was the employee’s employment status at the time of termination of the contract?

The question that naturally arises is if, the probation cannot be extended, what then is the legal status of the employee? Once an employer fails to dismiss the employee during the period of probation, the employee no longer continues on probation. On application of s12(5) of the Labour Act, the employee became a permanent employee of lapse of the probation period.

Do you have employees on probation now? Well, the above presents some thoughts that you need to possibly consider before making a decision. The latest position of the law was settled by the Supreme Court in the case of St. Giles Medical Rehabilitation Centre “v Lambert Patsanza SC59/18.

LEGAL DISCLAIMER: The material contained in this post is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. They are not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in the post. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements.

Arthur Marara is a corporate law attorney practicing law in Harare, Zimbabwe. He is also a notary public and conveyancer. He is also passionate about labour law, commercial law, family law and promoting legal awareness and access to justice. He writes in his personal capacity. You can follow him on social media (Facebook Attorney Arthur Marara), or WhatsApp him on +263780055152 or email attorneyarthurmarara@gmail.com