Setting a probationary period for a new employee gives both you and them a chance to size each other up. Are they right for the role, do they have the necessary skills and experience and will they fit in?
Usually, employment contracts set a three or six-month probationary period and indicate that, during probation, employees can be fired or resign on shorter notice.
It may be as little as a one-week notice period during probation compared with say, a one-month notice required after probation, says Andrew Jewell, Principal Lawyer at McDonald Murholme.
But, no matter what the contract says, Australia’s unfair dismissal laws have a role to play.
No unfair dismissal during probation
Employees cannot bring an unfair dismissal claim unless they’ve been employed in a small business (fewer than 15 employees) for at least 12 months, or in a larger business for at least six months.
That means an employee is not able to argue to the Fair Work Commission that their dismissal has been “harsh, unjust or unreasonable” during the first six months (or 12 months for small businesses) on the job.
Jewell says most contracts, at least in larger businesses, match the length of probation with the six-month qualifying period for unfair dismissal claims.
It doesn’t mean that employees have no rights during this period.
Unfair termination rights on probation
While the unfair dismissal law relates to a person’s conduct or capacity to do a job, general protections provisions cover employees from their first day on the job.
These provisions state that employees cannot be dismissed for certain reasons including discrimination; absences from work for illness or injury; union membership; or exercising a “workplace right”.
Jewell says this last point, exercising a workplace right, can easily trip up employers.
Knowing they’re not required to give reasons for termination during the first six months (or 12 months for small businesses), employers may dismiss their new employee ignoring that a complaint was made, for example a bullying claim.
“That can leave the employer exposed to a claim alleging a breach of the general protections provisions, arguing the employee was dismissed after they’d made their bullying complaint,” he says.
Jewell recommends providing employees dismissed during the probation period with a letter outlining the reasons, even though it’s not required by law.
“The employee might not agree with the reasons but at least you’ve put it in writing. If they say the dismissal was because of the bullying claim you’ve got a better case to argue.”
Still not sure about that new employee?
So, you’re at the end of the six-month probation and there are lingering doubts. Is this person really the best for the job?
Jewell says it’s probably best to make a decision right now. “Really, what’s another three months going to tell you that you didn’t already learn from the first six months?”
Regardless, don’t think that an extension of probation will be a magic solution.
First, unless an extended probation is already mentioned in the employment contract, you’ll need to obtain the employee’s agreement to alter the contract.
Second, the unfair dismissal protections will kick in anyway at six months (12 months for small business employees). So, the extended probation period’s only purpose may be to warn the employee that they’re still under close scrutiny. If you dismiss them after the six-month period you’ll need to provide proper reasons to show that the dismissal wasn’t harsh, unjust or unreasonable.
You can find more information about probationary periods as well as templates to help manage the process at the Fair Work Ombudsman.