In fact, the Probationary Contract is no longer uncommon to enterprises that generally deem that the probationary relationship is “not worrying or less risky” than the labor contract. However, this perspective has pushed some companies into a dilemma and to face many risks, such as disputes at labor agencies and courts. In order to ensure the recruitment of the appropriate personnel, the companies should consider the establishment of a probationary contract as well as the recording of job evaluation results, and the implementation of the notification process in accordance with regulations.
As we all know, both previous and current labor codes recognize the provision that the company is only allowed to give employees a probationary period once for a job.
With the above regulation, many views now understand that for a certain position at the company, a probationary period can only be applied to an employee once, in case an employee stops working or terminate the labor relationship with the company, then return to work with that job position, the company is not allowed to ask the employee for probation again.
1.1 Form of probation contract
The company and the employee can agree on the probationary relationship in one of the following two forms:
1.2 Contents not required to be agreed upon when entering into a probationary contract
The contents listed below are not required to be agreed upon when the company enters into a probationary contract with the employee:
Some of the required contents when entering into a probationary contract with the employee are:
1.3 Cases where probation is not applicable
Clause 3, Article 24 of the Labor Code 2019 stipulates that the company is not allowed to apply a probationary period to employees who enter into contracts with a term of less than 1 month. Thus, the requirement not to apply the probationary period of this regulation only applies to short-term labor contracts with a term of less than 1 month. Thus, only the company that intends to sign a contract with a term of 1 month or more with the employee has the right to agree on a probationary period with the employee and it is subject to the conditions mentioned in section 2. of this article.
The employer and the employee can freely agree on a probationary period based on the nature and complexity of the job, but must ensure the following conditions:
Thus, the new regulations eliminate the probationary period according to the term of the labor contract expected to be signed. Moreover, the Labor Code 2019 is restructuring the probationary period as well as supplementing the probationary period up to 180 days for the managerial position, people with high positions and powers in the company.
The employee’s salary during the probationary period shall be agreed upon by both parties but must be at least 85% of the official salary of that job.
In addition, the minimum wage during the probationary period (85% of the salary of the official job) must not be lower than the regional minimum wage for employees working under labor contracts issued by the government, determined by the administrative location where the employee works from time to time.
However, there are cases where the company recruits workers in senior management positions with very high salaries. Accordingly, the company needs to agree with the employee to pay a salary lower than 85% of the official salary as prescribed during the probationary period so that the employees can get used to the job, and the company also has time to assess the capacity of employees before giving official salaries and benefits. In fact, it is not difficult for us to see that many companies are applying the salary payment method on the basis of encouraging a higher salary when employees meet certain criteria, specifically:
4.1 End of probation during probation period
During the probationary period, each party has the right to terminate the signed probationary contract or labor contract without prior notice and without compensation.
4.2 At the end of the probationary period
At the end of the probationary period, the company must notify the employees of the probation results, specifically:
Some related notes in the probationary relationship:
The article is based on applicable law at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable law has changed and the specific case that the reader wishes to apply. Therefore, the article is only for reference.