Employment contract with a probation period

Probation is the period in which an employer assesses a new employee with a shorter notice period and a lighter process if it does not work out, and it has always done less than employers think: an employee in probation has every statutory right from day one except the ones that depend on service, and the law is now changing what service means for unfair dismissal. The contract has to set the length, the reviews, the extension and the notice, keep benefits lawful during probation, and provide the process for ending employment that works both now and under the statutory initial period of employment the 2025 Act introduces. I draft that contract for the employer for a fixed fee of £595, delivered in five working days, as a template.

Who this is for

Employers in England and Wales who want probation periods that work, and employers whose existing contracts treat probation as a period in which anything goes.

What matters in a probation period

What probation does and what it does not

Probation is a contractual arrangement: a stated period with reviews, a shorter notice period, and a right to extend or confirm, and the written particulars under section 1 of the Employment Rights Act 1996 must state its length and conditions; it does not suspend the employee's rights to the minimum wage, holiday, sick pay, pension assessment, protection from discrimination under the Equality Act 2010, protection for whistleblowing, or the right not to be dismissed for an automatically unfair reason, none of which depend on service, and an employer that dismisses in probation for a reason connected with a protected characteristic faces a claim regardless of length of service.

The length, the reviews and the extension

The contract should state the probation period (commonly three to six months, longer for senior roles), the reviews during it with their timing and the criteria, the employer's right to extend once for a stated further period where performance has not been assessed or needs more time, with written notice before the original period ends, and confirmation in writing at the end; an employer that lets probation lapse without confirming or extending has an employee who has passed it, and the contract should put the obligation to review on the employer with a consequence stated.

Notice during probation and the statutory floor

The contract can set a shorter notice period during probation than after it, but not below the statutory minimum under section 86 of the Employment Rights Act 1996 (one week after one month's service), and the contract should state the notice during probation, the notice after confirmation, the employer's right to pay in lieu, and the position on the employee's notice during probation; a probation clause allowing dismissal without notice is unlawful once the employee has a month's service.

Benefits, pension and holiday during probation

Benefits such as private medical insurance and enhanced sick pay can be deferred until probation is passed, and the contract should state which, but pension auto-enrolment under the Pensions Act 2008 can be postponed for at most three months, holiday accrues from day one under the Working Time Regulations 1998, statutory sick pay is payable from day one since the Employment Rights Act 2025 changes came into force, and the written particulars must state the benefits and when they start; a contract that withholds holiday or pension during probation is in breach whatever it says.

Ending employment during or at the end of probation

Dismissal during probation requires notice, a reason, and a process proportionate to the employee's rights: for an employee who cannot yet claim ordinary unfair dismissal, a meeting, the reasons and the chance to respond is good practice and protects against discrimination and automatic unfair dismissal claims, and for one who can, the full fair process; the contract should set the procedure the employer will follow at the end of probation (a review meeting, written confirmation, extension or dismissal) so that the decision is documented, because an unexplained dismissal at the end of probation is the one that is argued to be for a prohibited reason.

The statutory initial period of employment that is coming

The Employment Rights Act 2025 removes the two-year qualifying period for unfair dismissal and introduces a statutory initial period of employment during which a lighter dismissal process will apply for reasons connected with conduct, capability and the like, with the length of the period, the process and the compensation regime set by regulations and guidance on a timetable the regulations set; a probation clause drafted now should match the contractual probation to the statutory period where the regulations permit, provide the process the lighter regime will require, and be reviewed when the provisions come into force, because probation will become the period in which the statutory process applies rather than a period outside it.

What it costs

Employment contract, £595. One template you can reuse for a grade of staff. Five working days.

Staff handbook and core policies, £995. Five working days.

Buying online forms the engagement on payment. The scope is what the employment contracts and handbooks page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A bespoke contract drafted for how you employ people
• Restrictive covenants drafted at a scope a court will uphold
• Confidentiality and intellectual property provisions that put ownership where it belongs
• The statutory particulars, so the document does the job section 1 of the Employment Rights Act 1996 requires it to do
• Flexibility clauses where you genuinely need them, drafted to survive challenge
• Core policies: disciplinary, grievance, sickness absence, equal opportunities, data protection and, increasingly, AI use
• One round of amendments

What is not included

• Acting for employees
• Employment tribunal representation
• Payroll, pensions auto-enrolment and tax
• Immigration and sponsor licence work
• Day to day HR handling, disciplinaries, grievances and redundancy processes

Questions I am often asked

Can we dismiss someone in probation without a reason?

You need a reason and notice, and a process proportionate to the claims the employee could bring. Discrimination and automatic unfair dismissal claims do not depend on service, and the 2025 Act is changing unfair dismissal itself. The contract provides the process.

Can we withhold holiday and pension until probation is passed?

Neither can be withheld. Holiday accrues from day one and pension assessment can be postponed for three months at most. Benefits such as private medical cover can be deferred, and the contract says which.

Our probation period lapsed without a review. Has the employee passed?

In most contracts, yes, by default. The contract puts the review obligation on the employer with the consequence stated, so that the position is known.

Related guidance and services

• Employment contracts and handbooks, £595, the service this page describes
• Consultancy and contractor agreements, £595
• Settlement agreements for employers, £795
• Employment contract for your first employee

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.