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Probation period
in India.

SALARY PAYMENT IN Indian Rupee (INR)

CONTRACT LANGUAGES Hindi / English

PAYROLL TAX 16.75%

PAYROLL CYCLE Monthly

TIME TO HIRE 12 hours

Probation period in India – Overview

Employees in India usually complete a probation period when they begin employment. During their probationary periods, employees are not entitled to the same rights and benefits that an employee who has passed their probation period would be.

What is Probation Period in India?

In India, a probation period is a trial phase for new employees where employers can evaluate their suitability for the job. Probation periods are not legally required, but they are a common practice. Their typical duration ranges from 3 to 6 months.

The probation period for most central government jobs in India is two years, including jobs with the Union Public Service Commission (UPSC) and the Staff Selection Commission (SSC). 

During the probation period, either the employer or the employee can terminate the employment with shorter notice than would be usual for confirmed employment.

Video: Passing the Probation Period

Employment Contracts and Probation Periods

Probation periods in India are directly linked to the employment contract. This contract, whether a formal document or an offer letter, should explicitly outline the terms of the probationary period. 

This includes its duration, the possibility of extension (if applicable), and the specific conditions for either confirming the employee in the role or terminating their employment. Common types of employment contracts in India include fixed-term contracts for a specific duration and permanent contracts for ongoing employment.

It’s important to note that while probation periods are common practice, they are not mandated by Indian labor laws. Their inclusion, terms, and the rights of both the employer and employee during this period are all governed by the mutually agreed-upon employment contract.

Legal Rights of Probationary Employees in India

Probationary employees in India possess a set of fundamental legal rights. While they don’t have the same level of protection against termination as permanent employees, they cannot be dismissed arbitrarily. Employers must follow due process and provide a valid reason for termination, such as unsatisfactory performance or misconduct.

Importantly, probationary employees are entitled to several key protections. These include the right to receive their agreed-upon salary, statutory benefits like sick pay, protection against discrimination and harassment, and the right to form or join unions. Additionally, companies must provide a notice period before termination, even during the probation period, unless there’s a case of gross misconduct.

Legal Obligations of Indian Employers

During a probationary period in India, employers have specific legal obligations they must adhere to. Employers are legally required to:

  • Comply with labor laws, such as the Minimum Wages Act 1948, Payment of Bonus Act 1965, and Payment of Gratuity Act 1972.
  • Comply with social security legislations, which provide for certain statutory payments and benefits to employees.
  • Ensure workplace health and safety standards.
  • Register their establishment with the local authorities and obtain necessary licenses.
  • Display notices related to labor laws such as minimum wages, working hours, and other mandatory benefits.

Additionally, they must adhere to the following requirements:

  1. Minimum age
  2. Minimum wage
  3. Hours of work
  4. Rest days
  5. Public holidays
  6. Maternity & Parental Benefits
  7. Overtime
  8. Retirement
  9. Limit the amount of time that an employer can require an employee to work without a break.
  10. Make a 4.75% contribution of the employee’s monthly salary and 1.75% of the employee’s monthly salary to the Insurance fund.

Benefits of Probation Periods

Probation periods benefit both employees and companies by:

  1. Employees assess if the job aligns with their skills and interests, while companies evaluate their performance.
  2. Employees establish clear expectations and connect with colleagues, fostering a smooth transition.
  3. Employees receive additional training and supervision to learn or improve their job performance.
  4. Regular feedback helps employees adjust their approach and excel in their role.
  5. Employees have the opportunity to demonstrate unique skills and strengths, increasing their chances of securing the position

Best Practices in Managing Probationary Employee in India

Here are some best practices for managing employees during probationary periods:

  • Define goals: Outline clear expectations for the probationer’s role, including key responsibilities and performance metrics.
  • Detail probation terms: The employment contract or offer letter should explicitly state the duration of the probation period, possibility of extension, and conditions for confirmation or termination of employment.
  • Initial onboarding: Provide a structured orientation and introduction to the company, its work culture, and essential policies and procedures.
  • Provide mentorship: Assign a mentor or experienced colleague to offer guidance and support to the probationary employee, fostering a smoother learning curve.
  • Regular feedback: Schedule regular performance reviews to offer constructive feedback, identify areas for improvement, and provide opportunities for success.

Hiring in India, Made Easy

Your business can easily hire employees in India without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

FAQs

Employers do not have to give an employee any notice if they want to terminated their contract during the probationary period.

Employees do not have to give any notice to resign from their role if they are still on probation with a company.

The standard probation period for a new employee is around 3 to 6 months. There is no mandated requirement for probation periods. It is up to the employer upon the initial offer if an employee will undergo a probation period.

An employer can extend a probation period for up to 2 years.

Employers can terminate an employee during a probation period with no reason, notice or compensation.

 

An employee can resign from their position if still on probation without a reason, notice or with the expectation of receiving compensation.

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