Introductory vs Probationary Period
Historically, employers have used the term probationary period to mark a new employees’ first few months of work at the company. The use of that term, however, can convey the expectation of special or expanded employment rights that were not intended by the company. Using the term “introductory period” instead eliminates any confusion. It also places the focus back on what this period designates: a time frame where both the employer and new employee can evaluate their relationship and see how it works for both parties.
The confusion with using the probationary period phrase to define this time frame derives from labor history in the United States. It started when unions established a period during which they could terminate the employment of people that did not work out prior to them becoming eligible for the collective bargaining agreement’s job security provisions. In essence, the successful completion of this “probationary period” raised new employees to regular status and conferred to them rights they did not previously have. Over time, many nonunion employers adopted this idea of an initial trial period to evaluate a new hire’s performance, but completion of that period did not convey any additional rights or perks.
That process became nearly universal for many years, but the landscape has started to shift. Recent court decisions have curtailed the employment at will doctrine that gave employers the ability to terminate and employees to quit at any time and for any lawful reason. Nonunionized employers
have found that a “probationary period” may limit their right to terminate employees who
have completed the period. For example, some courts have found that an employer’s
distinction between probationary employees who can be fired at will and employees who
have completed the period creates an implied contract of employment. That changes the calculus by many companies in their efforts to not only find good talent, but develop and retain them for the benefit of both parties.
These court rulings have established grounds that employees who have completed their probationary periods no longer fit the at-will employee definition and therefore can only be terminated for cause. The employers, in these cases, claimed to reserve the right to terminate the new employees during the initial period, but failed to adequately preserve the continued at-will status of employees who completed the period.
Policies that designate employees’ trial periods or reclassify new employees after the period ends have also been judged in the favor of employees having enhanced job rights. It seems companies are recognizing the value of using the introductory period language to avoid undercutting the employer’s right to terminate employees at will. The introductory phrase conveys that the new
employee is being introduced to the organization and that both parties have the opportunity to
evaluate each other. Other employers may also call it a training period, orientation
period or initial employment period for these same reasons.
It also can be advantageous to have your company include an at-will statement as part of the introductory period paperwork. Courts have determined that an employer’s introductory period policy generally will not create a contract restricting at-will employment if the policy includes a clear disclaimer that confirms the employee’s at-will status throughout all stages of employment. For new employees, this is something to be aware of and evaluate as part of your decision to work for the employer in the first place.