Where there is uncertainty regarding suitability of a candidate for a particular job, it is usual to offer employment to such candidate on a probation basis. As the name 'probation' suggests, the employment offered is to ascertain or test the suitability of the employee on probation for the job. Consequently, it is clear that so long as an employee is on probation, continuation of his or her employment is not certain, and is subject to the employer being satisfied that the employee is suitable for the job.
The employment letter or the contract of employment may prescribe the manner in which the suitability (or confirmation) is to be communicated by the employer. It could be express or implied. The terms of the employment letter or contract may prescribe that the employee would be deemed to have completed his or her probation period successfully at the end of the probation period unless his or her employment is terminated prior to the date of probation period or the probation period is extended. Alternatively, the employment letter or contract may provide that probation period would continue till such time a confirmation is not given in writing by the employer.
In the event the employer is not satisfied with the performance of an employee on probation, the employer is free to terminate the services of the employee before the completion of probation period subject to the notice period, if any, prescribed in the employment letter or company's policy. Since the basic idea behind keeping an employee on probation is to give the employer an opportunity to evaluate the employee's performance before confirming the appointment, there is not even the need for an employer to wait for the employee to complete his or her probation period, before termination, if the employer is dissatisfied with the performance. It is also settled law that the employer is not under an obligation to establish or prove the unsatisfactory performance of a probationer through an enquiry prior to terminating his or her services. Nevertheless, it is important for employers to be aware of the legal issues surrounding termination of an employee on probation.
The termination is valid so long as it is done by a non-stigmatic order. In this regard, it is noteworthy that the Indian courts have consistently held that the termination of a probationary employee is to be done by a non-stigmatic order and principle of natural justice need not be followed while passing such order. Reviewing the case law will also assist us in understanding how the courts have interpreted 'stigmatic' and 'non-stigmatic' orders.
The Supreme Court of India in the matter of Chaitanya Prakash and Anr. Vs. H. Omkaraappa [(2010)2SCC623] observed that the termination order referring to the unsatisfactory services of the probationer cannot be said to be stigmatic and there is no need to follow the principles of natural justice while terminating the services of a probationer. Recently, Delhi High Court in The Managing Committee of Shiksha Bharati Senior Secondary Public School Vs. Director of Education and Anr. (2013) has taken a similar view wherein the respondent who was a primary teacher working on probation with the petitioner /school, was terminated by the school with immediate effect before the expiry of extended period of probation. The issue which came up for adjudication before the court was whether termination order stating that the employee lacked professional capability or was negligent and careless or her conduct was deplorable and had indulged in acts of indiscipline and insubordination would amount to order being stigmatic. The Hon'ble Court held that "law with respect to termination of services of a probationer is now well-settled and has to be by a non-stigmatic order. However, it has been held that stating that the performance is not satisfactory or giving of facts in the termination order will not amount to the termination order being a stigmatic one. Also the principles of natural justice have not to be followed before termination of services of a probationer. If an enquiry is held and the enquiry report forms the foundation of termination of services of a probationer, only then, principles of natural justice are required to be followed, however, where the enquiry against a probationer is only for determining employee's suitability for continuing in service and the enquiry report only forms the motive for removal (as differentiated from a foundation for removal) then, a detailed enquiry in terms of the service rules is not necessary."
Similarly, reference must be made to the judgment in the matter of Shri Syed Mohiuddin Ashraf & Anr. Vs. M/s. Central Electronics Limited (2013) wherein the Hon'ble Delhi High Court had taken the same view, with respect to the termination orders of the petitioners who were working with the respondent as probationary engineers. In the present case it was contended by the petitioners that their orders of termination were void as they are violative of principles of natural justice, arbitrary, stigmatic and punitive in nature and without any reason as the petitioners had rendered satisfactory services. In the present case, the Hon'ble Court brushed aside the contentions taken by the petitioners and it was held that the principles of natural justice need not be followed while terminating the services of a probationary officer. In so far as the plea of stigmatic order is concerned, the Hon'ble court observed that since the orders of termination only states that petitioners are unfit for continuing their work thus, the expression used in the order cannot be said as stigmatic in nature.
Additionally, in Progressive Education Society v. Rajendra [(2008)3SCC310], the Hon'ble Apex Court examined the correctness of the order passed by the School Tribunal quashing the termination of the service of respondent No. 1 on the ground of unsatisfactory performance during the period of probation and observed that "The law with regard to termination of the services of a probationer is well established and it has been repeatedly held that such a power lies with the appointing authority which is at liberty to terminate the services of a probationer if it finds the performance of the probationer to be unsatisfactory during the period of probation. Unless a stigma is attached to the termination or the probationer is called upon to show cause for any shortcoming which may subsequently be the cause for termination of the probationer's service, the management or the appointing authority is not required to give any explanation or reason for terminating the services"
Therefore, on a conjoint reading of the above observations by the various courts it is abundantly clear that once the facts stated in the termination are only the reasons and the conclusions for holding that the employee is unsuitable for his services, then the order cannot be said to be stigmatic. However, if the order imputes something more than unsuitability for the post in question then the order may be considered to be stigmatic. Moreover, it is not necessary for an employer to follow principles of natural justice even when the termination of the probationer is ordered on the ground of unsatisfactory service.
However, care should be taken by the employer in the event the employee is discharged by the employer on the basis of misconduct or if there is a nexus between the allegations of misconduct and discharge. In such an event, the order of termination, even if couched in language which is not stigmatic, may amount to a punishment for which a departmental enquiry may be imperative.
Originally published by www.humancapitalonline.com.
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