Probation Period Rules in India 2026: Notice & Extension

Probation period rules in India decide how long a new hire can stay on trial and what you owe them if you decide not to confirm. No single law fixes these rules for every private company. If your establishment has 300 or more workers, the Model Standing Orders, 2026 set probation at six months, extendable once by up to three months, with no notice owed to a probationer whose services are ended. Below that size your appointment letter sets the terms, but your state's Shops and Establishments Act may still require a reason and a month's notice once the person has three or six months of continuous service, whatever you call them.

That last point catches more employers than anything else in this area. A Bengaluru company extends a probation to nine months, lets the person go "for not clearing probation" and then finds that the state Act treated her as a six-month employee with full notice rights. The label on the letter does not change the service count.

This guide is for HR managers and founders writing a probation clause or deciding on a confirmation. Go to the Model Standing Orders for the six-month rule, to state notice rules for Karnataka, Telangana, Tamil Nadu, Delhi and Maharashtra, to termination during probation before you issue a letter, or to the worked examples for the numbers.

Nothing here is legal advice. All four Labour Codes came into force on 21 November 2025, and the Model Standing Orders, 2026 were notified on 8 May 2026. State Shops and Establishments Acts continue to apply alongside the Codes. Law as at 13 November 2026.

What is a probation period in India?

Probation is the first stretch of employment in which you check whether a new hire suits the role before making the job permanent. The Model Standing Orders, 2026 define a probationer as "a worker who is provisionally employed to fill a permanent vacancy in a post and has not completed six months service therein". A permanent worker, in turn, includes anyone who "has satisfactorily completed" that six-month probation. The word "satisfactorily" matters: the orders expect an assessment, not just the passage of time.

Two terms get mixed up with probation:

• Confirmation is your written decision that probation is over and the person is permanent. It is a positive act, normally a confirmation letter.
• Fixed term employment is a contract that ends on a set date. It is not probation, and a fixed term employee gets gratuity after one year under the contract. Our fixed term employment guide covers it separately.

Which law governs probation in a private company?

Three layers apply, and you check them in this order.

"Industrial establishment" under the IR Code is wide. It is not limited to factories, so a 350-person IT services company or hotel falls under Chapter IV too. If you had certified standing orders before the Code, the Ministry of Labour's FAQ 182 says they are deemed certified so long as they are not inconsistent with the Code. If you have none, section 29(2) treats the Model Standing Orders as adopted until your own are certified. That is why a 300-plus company with nothing on file is already on the six-month rule.

One carve-out matters for mid-sized firms. The IR Code's definition of "worker" in section 2(zr) leaves out people employed mainly in a managerial or administrative capacity, and supervisors drawing wages above ₹18,000 a month. Standing orders do not cover them. Karnataka's Shops Act also excludes "persons occupying positions of management" altogether (section 3(1)(h)). For senior hires, the contract and the general law do most of the work, which is one more reason to write the probation clause carefully in the appointment letter.

What do the Model Standing Orders, 2026 say about probation?

The Ministry of Labour and Employment notified the Model Standing Orders, 2026 by S.O. 2312(E) on 8 May 2026, with separate schedules for mining (Schedule A), manufacturing (Schedule B) and services (Schedule C). The probation wording is identical in all three. Paragraph numbers below are for the services schedule, with manufacturing in brackets where they differ.

Two things follow for HR. First, any policy that "excludes leave and LOP days from probation" does not work for workers covered by these orders, because those days already count as probation. Second, the 30-day clock runs from the date of confirmation, so the decision itself should be on paper before the end date, not weeks after it.

Is notice period applicable during probation? State Shops Act rules

Most private offices in India sit under a state Shops and Establishments Act, not under standing orders. These Acts rarely use the word probation. They count continuous service instead, which is how a company ends up owing a month's notice to someone it still calls a probationer.

Karnataka's section 39(7) adds a twist: if a contract or agreement gives a longer notice period or better benefits, the section applies as if that longer period had been written into the Act. A generous notice clause in your appointment letter becomes the statutory floor in Karnataka.

Check your own state before relying on this table. Other states have their own thresholds, and some Acts exclude managers or specific sectors. Our Shops and Establishment Act glossary entry explains how these Acts work in general.

Can a company terminate an employee during probation?

Yes, within four limits.

• Notice. Under standing orders, a probationer is owed no notice. Under a state Shops Act, the service threshold decides, not the label. If your appointment letter promises notice during probation, you owe what you promised.
• Reason and wording. A plain termination for unsuitability is the safest form. In Dipti Prakash Banerjee v. Satyendra Nath Bose National Centre for Basic Sciences (1999) 3 SCC 60, the Supreme Court set aside a probationer's termination because the order referred to findings of misconduct made without a proper inquiry. That case involved a government-funded institute, so its reach over private employers is debatable, but the practical lesson is the same: keep the letter neutral. If misconduct is the real reason, follow the show cause notice route instead.
• Retrenchment. Under the IR Code, retrenchment notice and compensation (section 70) apply to a worker with at least one year of continuous service. Section 66 deems a worker to have one year of continuous service if they actually worked 240 days in the preceding 12 months, so a probation stretched to nine or ten months can get close. Whether ending such a probation counts as retrenchment can be argued either way. The simple answer is to decide well before that point.
• Maternity. Section 68 of the Code on Social Security makes it unlawful to discharge or dismiss a woman during or because of her absence on maternity leave. "Probation not cleared" is not an exception.

However the employment ends, wages are due within two working days under section 17(2) of the Code on Wages, and the standing orders say the same for covered workers. Our full and final settlement guide walks through the settlement, and the termination letter template gives you neutral wording to start from.

Can an employee resign during probation?

Yes. The Labour Codes do not set a resignation notice period for most employees, so the appointment letter decides. Probation notice is usually shorter than the confirmed notice period, often 15 days or none. Delhi is an exception worth knowing: section 30(2) of the Delhi Act requires an employee with three months' continuous service to give one month's written notice, or pay one month's pay to be released.

If the employee leaves short, recovery follows the contract and the same formula you use after confirmation. See notice period recovery and buyout, or check the shortfall with the notice period calculator. Do not hold back the service certificate to force someone to serve notice. For covered workers the standing orders require it within 10 days, and a relieving letter should follow the same timeline.

How long can probation be extended in India?

Under the Model Standing Orders, once, by up to three months, after a performance assessment. That gives a ceiling of nine months for workers in a 300-plus establishment. Leave and accident time does not stretch the clock, because the orders count those days as probation.

Outside standing orders, no statute caps probation or its extension, so the contract governs. Three or six months is the usual starting point. If you want a ceiling that is easy to defend, mirror the model orders in your letter: six months plus one extension of up to three. Every further extension makes it easier for the employee to argue that you had already accepted their work, and in Karnataka or Tamil Nadu the six-month notice threshold arrives anyway.

An extension should be in writing, issued before the original end date, and should say what has to improve and by when. A performance improvement plan gives the extension a structure. A letter sent a week after the end date is a weak document, because by then the person may already be treated as confirmed.

Is confirmation automatic after probation ends?

Often, yes, but it depends on how your letter is worded. In High Court of M.P. v. Satya Narayan Jhavar (2001) 7 SCC 161, the Supreme Court grouped probation rules into three kinds:

• No maximum period fixed. No deemed confirmation. The person stays a probationer until confirmed.
• Maximum period fixed, nothing more required. If the person keeps working after the maximum, they are deemed confirmed.
• Maximum period fixed plus a positive act required, such as a confirmation order or passing a test. Silence does not confirm them.

That case was about judicial officers, so it does not bind a private appointment letter directly. Its logic is still the clearest guide available. A letter that says "probation of six months, extendable by a maximum of three months" and nothing else looks like the second kind. If you want confirmation to depend on a written letter, say so in the appointment letter, and then issue the letter on time. Our probation confirmation letter template has five versions, including extension and non-confirmation.

For workers under the Model Standing Orders, the employer must confirm the eligible worker in line with the appointment letter and record it in the service card within 30 days of confirmation. Leaving a good performer unconfirmed for months is now a record-keeping gap as well as an HR one.

Do probationers get PF, ESI, leave, gratuity and bonus?

Yes. A probationer is a full employee for every statute. Nothing in the Labour Codes postpones a benefit until confirmation, so payroll should treat day one as day one.

Worked examples: notice, dates, leave and gratuity

Example 1: the Karnataka notice trap. Priya joins a 140-person Bengaluru software company on 1 April 2026 at a gross of ₹42,000 a month. Her letter says six months' probation. On 30 September her manager extends it by three months. On 20 November 2026 the company ends her employment, calling it "probation not cleared".

• The company has fewer than 300 workers, so standing orders do not apply. The Karnataka Shops Act does.
• Continuous service on 20 November is 7 months 19 days, past the six-month threshold in section 39.
• So the company needs a reasonable cause, such as a documented performance assessment, and must give one month's notice or ₹42,000 in lieu. The extension letter does not change this.
• November salary for 20 days on a 30-day basis: ₹42,000 ÷ 30 × 20 = ₹28,000.
• Total due within two working days: ₹28,000 + ₹42,000 = ₹70,000, plus pay for any unused earned leave, which Karnataka's section 15(13) also requires by the second working day.

Had the same decision been taken in August, at four months of service, section 39 would not have applied, and the probation notice clause in her letter would have governed.

Example 2: dates under the Model Standing Orders. Ravi joins a 450-worker manufacturing plant on 15 January 2026. During probation he takes 12 days of leave and is off for 9 days after a minor accident.

• Probation ends on 14 July 2026. The 21 days off count as part of probation, so the date does not move.
• If his assessment supports it, the plant may extend once by up to three months, to 14 October 2026 at the latest.
• If he is confirmed on 15 July, the service card entry is due by 14 August.
• If the plant decides not to confirm him, it owes no notice under the standing orders, but his dues must still be paid by the second working day.

Example 3: leave for a mid-year joiner. Ayesha joins on 1 July 2026. There are 184 days left in calendar year 2026, and one-fourth of that is 46. Once she has worked 46 days she qualifies for annual leave under section 32(1)(v) of the OSH Code. If she works 120 days by 31 December, she earns 120 ÷ 20 = 6 days of annual leave, probation or not.

Example 4: gratuity counts from joining. Suresh joined on 1 August 2021 on six months' probation and was confirmed on 1 February 2022. He resigns effective 15 August 2026. His last drawn wages for gratuity, meaning basic and DA after applying the Codes' 50 percent test, are ₹30,000 a month.

• Service from joining: 5 years and 14 days. He is eligible.
• Service from confirmation would be 4 years 6 months 14 days. A payroll that starts the clock at confirmation would wrongly deny him.
• Gratuity: ₹30,000 × 15 ÷ 26 × 5 = ₹86,538 (rounded).

You can check the figure in the gratuity calculator by entering ₹30,000 as basic plus DA and five years of service.

Probation process checklist for HR

• Find your regime. Count workers on any day in the last 12 months. At 300 or more, the Model Standing Orders or your certified orders apply. Below that, your state Shops Act and the contract.
• Write it into the appointment letter. Length, one extension and its cap, notice on each side during probation and after confirmation, and whether confirmation needs a letter. The appointment letter generator is a good starting point.
• Record the end date on day one in the HR system, with a reminder 30 days before.
• Set goals in the first two weeks so the review has something to measure.
• Hold a mid-point check-in at month three of a six-month probation and keep the notes.
• Decide before the end date: confirm, extend in writing with reasons, or separate.
• Issue the letter on time, then make the service card entry within 30 days for covered workers.
• Update payroll and leave for anything confirmation changes, such as notice period, leave availment, insurance or variable pay.
• For separations, check the state Act threshold, keep misconduct language out of the letter, and pay dues within two working days.

The employee onboarding checklist covers the joining-side steps that feed this process.

What are the common probation mistakes employers make?

• Treating the label as the law. In Karnataka, Telangana, Tamil Nadu and Delhi the state Act counts service, so a long probation can still need a month's notice.
• Starting PF, ESI or gratuity from confirmation. All three run from the joining date.
• Extending probation after it has ended, or extending it again and again. Under standing orders you get one extension of up to three months.
• Pushing the end date for leave taken. For covered workers, leave and accident time count as probation.
• No confirmation letter. Silence plus a fixed maximum period in the letter can amount to deemed confirmation, and for covered workers it also misses the service card entry.
• A termination letter that alleges misconduct without an inquiry.
• Holding back the full and final settlement or service certificate to pressure someone into serving notice.

Probation period FAQs

What are the probation period rules in private companies in India?

There is no single central rule for every company. Industrial establishments with 300 or more workers follow standing orders, and under the Model Standing Orders, 2026 that means six months, extendable once by up to three months. Smaller companies follow the appointment letter, subject to their state Shops Act's notice rules.

What is the maximum probation period in India?

Nine months in total for workers covered by the Model Standing Orders: six months plus one extension of up to three. For everyone else no statute sets a maximum, and the appointment letter decides. Three or six months is common.

Is notice period applicable during probation in India?

Under standing orders, a probationer is not entitled to notice. Under some state Shops Acts, notice becomes due once the person has three months (Delhi) or six months (Karnataka, Telangana, Tamil Nadu) of continuous service, whether or not they are still on probation. Otherwise the appointment letter decides.

Can a company terminate an employee in probation period without notice?

Yes, if neither a state Act nor the contract requires notice. In Karnataka, an employee with six months' continuous service needs a reasonable cause and one month's notice or pay, even if still on probation.

What are the probation period rules in Karnataka?

The Karnataka Shops and Commercial Establishments Act, 1961 does not fix probation length. Section 39 requires a reasonable cause and one month's notice or pay in lieu once an employee has six months of continuous service, and section 39(7) makes any longer contractual notice the floor.

What are the probation period rules in Telangana?

Section 47 of the Telangana Shops and Establishments Act, 1988 bars termination without a reasonable cause and without one month's written notice or wages in lieu once the employee has six months of continuous service. After one year, service compensation of 15 days' average wages per year is also due. The termination order must be in writing, with a copy to the Inspector within three days.

Is PF deducted during the probation period?

Yes. PF and ESI apply from the date of joining in a covered establishment. Confirmation has no bearing on them.

Does probation count for gratuity?

Yes. Continuous service is counted from the joining date, so probation is part of the five years.

What happens if a confirmation letter is not issued after probation?

If the appointment letter fixes a maximum probation and does not make confirmation depend on a written order, the employee may be treated as confirmed once that maximum passes. For workers under the Model Standing Orders, the employer must confirm eligible workers and enter the confirmation in the service card within 30 days.

How does Engage help you track probation?

Most probation problems are missed dates rather than bad decisions. Engage Core HR keeps each employee's joining date, documents and letters in one central record, so the probation clause in the appointment letter sits with the person it applies to, and goals and reviews run in the same system. Leave and attendance feed that record, and Engage payroll runs PF and ESI from the joining date. On exit, it computes gratuity, leave encashment and notice recovery together, so the full and final settlement closes on time. Roles and permissions control who sees which records, and every payroll change is written to an audit trail with the user and time. Engage is built for companies with 50 or more employees, and pricing is on the site.

Related reading: the glossary entries for appointment letter, employee termination, retrenchment and full and final settlement, and the labour law compliance checklist.

Sources

• Model Standing Orders, 2026. S.O. 2312(E), 8 May 2026. Schedules A to C: paragraph 2 on classification and probation; paragraphs 13 to 15 on service records and confirmation; paragraphs 22 and 23 on termination.
• Industrial Relations Code, 2020. Section 2(zh) on retrenchment; section 2(zr) on workers; sections 28 to 30 on standing orders; sections 66 and 70 on continuous service and retrenchment.
• Code on Social Security, 2020. Section 53 on gratuity; sections 60 and 68 on maternity benefit.
• Code on Wages, 2019. Section 17(2) on payment of wages on exit; section 26 on bonus eligibility.
• Occupational Safety, Health and Working Conditions Code, 2020. As hosted by DGFASLI. Section 6(1)(f) on appointment letters; section 32 on annual leave with wages.
• Ministry of Labour and Employment, Compilation of FAQs on Four Labour Codes and Central Rules (as on 25 October 2026). Questions 56, 113, 114, 164 to 166 and 182.
• S.O. 5109(E), 17 September 2026. PF wage ceiling of ₹25,000 a month.
• Karnataka Shops and Commercial Establishments Act, 1961. As amended, PRS Legislative Research copy. Sections 3, 6A, 15 and 39.
• Telangana Shops and Establishments Act, 1988, section 47.
• Tamil Nadu Shops and Establishments Act, 1947, section 41.
• Delhi Shops and Establishments Act, 1954, section 30.
• Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017. Municipal Corporation of Greater Mumbai copy.
• High Court of M.P. v. Satya Narayan Jhavar, Supreme Court, 14 August 2001, (2001) 7 SCC 161.
• Dipti Prakash Banerjee v. Satyendra Nath Bose National Centre for Basic Sciences, Supreme Court, 10 February 1999, (1999) 3 SCC 60.