Probationary Arrangement is terms set between an employer and a new hire. When an employer hires a new person to the company, it would want to observe the capacity & performance of the hire with regards to the job given.
Usually, a clause is included in the Offer of Employment Letter indicating the probationary period (90 days or 6 months). During this period, the new hire is observed and monitored by the employer as to whether the person is capable enough to do the job. Human Resource Managers use this period to assess the hire in terms of getting accustomed to the culture of the organisation, associating with superiors & peers etc.
If an employer finds the performance of the person to be non satisfactory, the employer has the right to terminate the employment service. But this dismissal should be properly quantified and must be given with proper feedback. There is very little an employee can do once he/she is dismissed after a probationary period. Some companies might not want to fire a person, but could extend the probationary period after providing the necessary feedback.