Getting Smart with: Poor Work Performance, Probation Periods and Fixed-Term Contracts

Getting Smart with: Poor Work Performance, Probation Periods and Fixed-Term Contracts

Poor work performance might be considered as an unfamiliar process to a lot of employers. The problematic part comes in at the inception of the employer-employee relationship, once the employer decides to hire a new employee. Not much is known about this employee’s working ability and the employer is left with nothing but his better judgement and the hope that this person would be able to handle the tasks given.

What to do when that employee seems to struggle with his or her duties? A lot of employers feel that in order to avoid such later disappointment, they would start off by initially giving the employee a fixed-term contract and/or to place this employee under a certain probation period. Can this be fair and correctly executed? Let us consider the legal aspect thereto:

Poor Performance Procedures

Poor work performance can be considered as a form of incapacity. This means that the employee no longer maintains or could not as of yet, reach the specific performance standards created by the employer, in terms of quality and quantity of output (these standards should, however, be reasonable, lawful and attainable). It is expected and agreed upon by the parties involved in the employment contract, that the employee should be able to perform the specific tasks elected by the employer, so when this is no longer achieved, or never has been, the employer will be obliged to consider following a fair procedure in which the employee’s expected performance is measured. Should it seem that the employee can be considered as “incapable” of performing his expected duties, for reasons unrelated to misconduct or medical problems, the employer will be in a position to dismiss this employee after following the said fair procedure.

Probation vs Fixed-Term Employment Contracts

It can be confusing to understand all the differences between employment contracts containing probationary periods and employment contracts with a fixed duration. Both these forms of contracts may be used in limited circumstances and both may have its advantages. It is, however, important to distinguish between employment contracts with probationary periods and employment contracts which has a fixed duration.

Probation Periods

The probation period in a contract allows the employer to determine the performance of the employee before confirming the permanent employment of that employee. Throughout this period, it is vital that the employer assist, evaluate, train and support the employee. This will enable the employer to assess whether the employee is in fact, capable and eligible for the specific position. The employer has a substantial duty to ensure that the employee is assisted in this regard, and it is possible to say that this employee can be considered as an “almost employee”. It is suggested to employers that after such period has come to an end, the employer may meet with the employee to consider his performance up to date. Many employers deem to surpass this final step, arguing that should this probation period be at an end and no communication regarding the employee’s performance be initiated by the employer, the employee can consider himself/herself as a permanent employee, having successfully passed the probation period.

If however, the employer determines that the employee is not performing as required, the employer may then choose to extend the probationary period. It is also possible to terminate the employment of the employee, however, the correct procedure, namely the poor work performance procedure, must then be followed by the employer.

Fixed-Term Contracts

It is important to remember that employees under this type of contract, will not be considered as probationary or permanent employees. These employment contracts will terminate automatically upon the happening of a certain event, such as a pre-determined date or the completion of a specific project.   The automatic termination of a fixed-term contract is viewed to have been a termination by mutual agreement between the parties and therefore the cessation of employment will not constitute a dismissal.   

When to  use which contract

Most employers would have a standard contract for each different type of contract at their disposal. The correct contract will depend upon the nature of the position offered and the future requirements of the business.

What to do when the employee no longer performs as expected or does not reach his target?

The idea of a fixed-term contract might seem a good solution: Inform the employee that the fixed-term contract has expired. But how would this work? It is not uncommon for an employer to appoint someone for a fixed-term of 3 months and then to make the appointment permanent if the employee has shown he can do the job. However, if the person does not meet the required performance standards or does not fit in with the business, some employers would merely inform the employee that the fixed-term contract has expired and he or she would not have to go through performance management proceedings with this employee. This is strongly advised against as this approach is flawed and this strategy creates more problems than it can solve.

Why is this flawed?

It will be difficult to explain why it has been necessary to appoint the person on a fixed term if the position is not inherently of a fixed-term nature. In other words, if the employer appoints someone on a fixed-term contract, and in the past, the employer appointed other people in this same position on a permanent basis, arbitrators will question this and should the employer then not be able to give a satisfactory answer, it might be assumed that the employer appointed him on a fixed-term contract to deprive him of protection against unfair dismissal. The fixed term will then be regarded as a hidden probation period and not appointing the employee will be regarded as a dismissal. Furthermore, using a fixed-term contract as a hidden probation period might give the employer a false sense of security, as he or she might feel that this is the easiest way out to get rid of an employee who does not fit in or does not perform.

Procedural and Substantive fairness in dismissal 

In all cases, dismissal must be preceded by a fair procedure (procedural fairness) and the dismissal must be effected for a fair reason (substantive fairness). Procedural fairness will be achieved by the employer following the necessary procedure shortly explained at the end of this article.

Substantive fairness is achieved by the employer proving that the employee failed to meet the work performance standard, despite having been given the necessary evaluation, counselling, training and guidance and despite having been afforded a reasonable time period in which to attain and maintain the required standard. Thus the only remaining option will be dismissal.

A fair procedure entails, but is not limited to, the following:

  1. Establishing that the real problem is one of poor performance and not based on misconduct.
  2. Determining and identifying the causes of the poor performance.
  3. Meeting with the employee and his direct manager to establish the cause or causes of the poor performance.
  4. Establishing the employee’s specified reasons for the poor performance on his/her part and then evaluating it.
  5. Consider what actions the employee agrees to take in order to rectify his/her performance.
  6. Ensure the employee is informed about the action the employer will take in order to assist the employee in the above mentioned.
  7. Decide on a time period for improvement (this should always be a reasonable time period).
  8. Follow up and monitor the progress, including the employee in the process as far as necessary and possible.

Should it be determined that the employee has completed this poor work performance process and he/she did improve in terms of performance, the employee should be left to return to his position as normal. Should he/she not improve based on performance, a dismissal might be imminent.


Sunette Klopper obtained her LLB degree from the University of the Free State. She is currently a legal advisor of SEESA Labour at Head office in Pretoria and has been with SEESA since February 2017.


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