When probationary period encounters pandemic

By Shen Minquan, Jingtian & Gongcheng
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The COVID-19 pandemic not only has a huge impact on the operation of employers, but also triggers a series of employment management and compliance issues under the Employment Contract Law. When it comes to an employee under probation, what if the employer cannot assess the job competency of the employee infected with COVID-19 during the probationary period? If the employee’s work performance cannot be adequately assessed due to his/her work-from-home period overlapping with his/her probationary period, can the employer extend the probationary period through negotiation with the employee?

probationary period
Shen Minquan
Partner
Jingtian & Gongcheng

The article discusses how to deal with such difficult issues regarding probationary employees to help employers properly manage this relationship.

Can the probationary period be extended for employees infected with COVID-19 during their probation? The employer and the new hire need to further understand each other to decide whether or not enter into a regular work relationship. Thus, the law introduces a probationary period, a short and experimental period for both parties. However, the COVID-19 lockdown may result in ineffectiveness of the agreed probation due to, for example, the probationary employee being tested positive for COVID-19.

The law sets a ceiling for the probationary period, and as a result, the employee has a limited period of time to assess the job competency of the new hire. Against the backdrop of the pandemic, the employer may find it impossible to exercise its right to assess a new hire’s competency. In this case, is the employer allowed to extend the probationary period for new hires?

The Employment Contract Law and other relevant laws and regulations of the state provide no clear-cut answer in this regard, and local judicial practices take various attitudes.

Jiangsu and Zhejiang provinces support employers in extending the probationary period for new hires in such circumstances. For example, in accordance with article 2 of the Notice of the First Civil Division of the Higher People’s Court of Zhejiang Province, and the Zhejiang Labour Dispute Arbitration Committee on issuing the Notice on the Answers to Questions concerning Hearing of Labour Disputes (IV), “the probationary period is a period of mutual assessment between the employer and its employee. As the employee’s sick leave during the period affects such assessment, the days of sick leave can be removed from the probationary period.”

For another example, in accordance with article 15 of the Regulations of Jiangsu Province on Employment Contracts, “where an employee gets sick or has to be suspended from work for treatment of a non-work-related injury, the probationary period should be suspended for the required medical treatment period”.

The Shanghai authorities also tend to opine that if an employee is absent from work on sick leave during the probationary period, the employer may extend the probationary period accordingly. For example, in the labour dispute between Shanghai Lianghong Printing and Tang Xingqi, the Second People’s Intermediary Court of Shanghai held that the probationary period is an assessment period as part of the term of the employment contract, designed for the employer and its employees to better know and decide to choose each other or not.

The probationary period is not only intended to ensure a full and reasonable utilization of labour resources, but also to protect employees’ right to choose employers. Therefore, it is necessary to assess whether the employee is as competent for the job as stated upon recruitment, and whether the employer provides the same working conditions as promised upon recruitment, in the course of performing their respective rights and obligations under the contract.

Imagine that if an employee asks for sick leave immediately after recruitment, and does not return to work until expiration of the probationary period, the argument that the probationary period has expired and the assessment of the employee should be terminated obviously deviates from the legislative intent. Therefore, the probationary period should be a period of assessing performance of rights and obligations under the employment contract, and there should be circumstances that justify its suspension.

Is a company allowed to extend the probationary period through negotiation with employees in probation? Local governments have required businesses to postpone resumption of work to control the spread of COVID-19. Many enterprises asked their employees to “work from home” to minimize the COVID-19 impact on business activity, where possible. However, many enterprises are hoping to negotiate with their employees to extend the probationary period, due to the concern over impossibility to adequately assess the employee’s performance during the probationary period. If so, is such practice lawful and feasible?

In this regard, there are no explicit legal provisions. As shown by judicial practices in Beijing, Jiangsu and Shenzhen, most courts tend to maintain that the negotiated extension of probation evades the rule set out in the Employment Contract Law that “the employer shall stipulate only one probationary period with one employee”, and is suspected of infringing upon the employee’s rights, holding such agreements invalid for breach of mandatory legal provisions.

However, Shanghai’s judicial practices show a different viewpoint on this issue. In some cases, the Shanghai courts had shared opinions with the Beijing and Jiangsu courts, and refused to accept the validity of such agreements. But in other cases, the courts held that the employer and its employee can extend the probationary period through negotiation, as long as such extension does not exceed the statutory maximum period.

To sum up, if the pandemic prevents an employer from fully assessing the work performance of its probationary employees, the employer should make reasonable adjustments and arrangements for the probationary period for such employees according to particular circumstances, taking into full account the tendency of the judicial authorities of their competent jurisdiction.

Tracy Shen Minquan is a partner at Jingtian & Gongcheng

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