The TTIA’s CEO, Brian Beecroft, outlines some of the legalities involved in using probation periods when employing staff.
The purpose of a probation period is to allow a reasonable opportunity for a business to induct and train an employee in a position, and assess the employee’s aptitude and competency, to determine whether they are suitable for the organisation and the position. It is, in a real sense, a practical extension of the selection process.
If the probationary employee proves to be unsuitable for the job, the employer may want to terminate employment with a week’s notice, or equivalent pay in lieu, without having to exhaust the time and resources associated with a formal counselling or warning process.
The length of a probationary period
It’s important for employers to be aware that if a probationary period extends beyond six months (or 12 months for a small-business employer), the employer risks a likely unfair dismissal claim for ending employment without providing reasons for termination and/or opportunities to improve performance. This is because the Fair Work Act’s minimum qualifying period will override any probationary term in an employment contract when determining whether an employee is protected from unfair dismissal.
In order for a probation period to be an effective safeguard for employers, it is crucial that:
* The amount of time allocated to probation in an employment contract (including extensions to probation) does not exceed the qualifying period for unfair dismissal – which is six months (or 12 months for a small business employer);
* the employer reviews the suitability of the probationary employee for ongoing employment prior to the end of the qualifying period; and
* if the employee is unsuitable, a decision to terminate probationary employment is confirmed prior to the end of the qualifying period.
Legal protections relevant to probationary employees
It is unlawful to dismiss a probationary employee (or any employee) for reasons that are in breach of their general protections, in breach of discrimination laws, or are specified as unlawful reasons in employment legislation. This is distinct from the unfair dismissal provisions.
Dismissal of a probationary employee
If the person’s employment has not reached the minimum qualifying period for unfair dismissal (six months or 12 months), the employer is not required to use formal processes such as disciplinary meetings, performance improvement plans, or formal warnings when ending the probationary employment. The probationary employee may, however, be entitled to consultation in the event of redundancy or major workplace change. Contact TTIA in these circumstances for more assistance.
Remember that probationary employees (other than casuals and fixed-term employees) are also entitled to written notice of termination in accordance with the National Employment Standards (NES).
Does an employer need to provide reasons to dismiss a probationary employee?
If the employee does not qualify for unfair dismissal, they are not entitled to written reasons for dismissal.
However, a written notice should be given reminding the employee they are on probation, which is an extension of the selection process, and that the business has decided to discontinue their employment based on the terms of that probation period.
For clarification on any employment-related issues, contact TTIA by email at ttia@ttia.asn.au, or speak to a member of the TTIA team on (02) 9264 0011.
For more information on TTIA, visit ttia.asn.au.
