Probationary Periods

Probationary Periods

HR Business Assist’s best practice tips for utilising a probationary period!

What is a Probationary Period?

A probationary period is an amount of time that allows both the employer and the employee to assess whether the employee is suitable for the role and business.

Full-time and part-time employees (excluding casual employees) may be placed on a probationary period at the commencement of their employment.

Although an employer can decide on the length of the probationary period, it is recommended that employers set the probationary period to mirror the applicable minimum employment period.

The minimum employment period is the amount of time an employee must serve with the business before they are eligible to make an application for an unfair dismissal remedy, which is:

  • six months for non-small business employers; or
  • One year for small business employers.

It is worth noting that periods of service as a regular casual employee may count towards the minimum employment period.

Further, while on probation, employees continue to receive the same entitlements as someone who is not on probation.  Accordingly, a full-time or part-time employee is still entitled to:

  • accrue and access paid leave entitlements such as annual leave and personal/carer’s leave;
  • receive notice when their employment ends if they are unsuccessful in their probationary period; and
  • have their unused accumulated annual leave hours paid out on termination of employment.

 

Unfair Dismissal & Probationary Periods

A main benefit of implementing a probationary period is that an employee will not be eligible to make an unfair dismissal claim if they are terminated within their probationary period.

Unfair dismissal occurs when an employee is dismissed from their job in a harsh, unjust or unreasonable manner and they have met the eligibility criteria, such as serving their minimum employment period.

Nevertheless, where a dismissal occurs either inside or outside of the probationary period, an employee may still initiate other claims if the dismissal is due to discriminatory reasons or where adverse action has been taken because an employee exercised or proposed to exercise a workplace right (such as a discrimination or general protections claim).

Accordingly, employers should ensure that an unsuccessful probation discussion is purely around why the employee is not suitable for the role and business based on performance or conduct.

Small Business Employers & Probationary Periods

The Fair Work Act 2009 defines a Small Business Employer as a business with fewer than 15 employees.

This is calculated on a simple headcount of all full-time, part-time and regular casual employees.  When determining which employees are counted for these purposes, include:

  • casual employees who are employed on a regular and systematic basis;
  • any employee who is being dismissed or whose employment is being terminated;
  • associated entities are taken to be one entity.

Small business employees are not eligible to make a claim for unfair dismissal within the first 12 months following their engagement.

Please note that where a Small Business Employer intends to terminate an employee outside of their probationary period, the employer must follow the Small Business Fair Dismissal Code (“the Code”).  When an employer satisfies the Code’s requirements, the Fair Work Commission will likely consider a person was not unfairly dismissed.  The Code can be accessed – here.

 

Best Practice Tips

  • Determine the length of the probationary period (i.e. six months or 12 months for a small business)
  • Conduct regular check ins to provide feedback. This should be an open and interactive discussion that focuses on the employee’s strengths, areas for improvement and any plan moving forward that addresses the employee’s development.  This will ensure that the employee is aware of their performance and is not blind-sided by an unsuccessful probationary determination.
  • Follow disciplinary processes (i.e. verbal or written warnings) where required.
  • Set reminders for regular check ins and the probationary period expiration date so you don’t miss it. We recommend scheduling one month, three month and five months check-ins and a reminder two weeks before the final expiration date.
  • Send meeting invitations with an agenda of matters to be discussed during the check-ins so that everyone is on the same page and can come to the meeting prepared.
  • If successful – meet with the employee to tell them the outcome and provide them with a letter of confirmation.
  • If unsuccessful – meet with the employee to tell them the outcome and provide them with a termination letter.  Employers must ensure this occurs before the expiration of their probationary period and that the employee is terminated subject to written notice in accordance with the relevant provisions of the NES, industrial instrument or employment contract.

 

Need assistance with the probationary period process or an underperforming employee?  HR Business Assist can provide you with a range of scripts, checklists and letters to assist you.

 

Resources

Small Business Code Checklist (scroll to bottom of page) – click here.

Fair Work Commission – click here.

Fair Work Act 2009 – click here.

 

Contact our team today for more information.

HR Business Assist | P 1300 138 551 | E info@hrbusinessassist.com.au

 

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