By Charles Power
Over recent weeks, we’ve had a number of queries come through about probationary periods and how they relate to the minimum employment period.
Probationary periods provide an opportunity to assess the employee’s suitability for the role for which they have been recruited. From the perspective of the probationary employee, there is an appreciation that that their work performance will be under review and they do not have a guarantee of ongoing employment.
However, probationary employees are not exempt from Fair Work Act (FW Act) unfair dismissal laws. The FW Act’s predecessor, the Workplace Relations Act, exempted employees serving a reasonable period of probation from unfair dismissal laws.
That exemption is not provided in the FW Act. Instead, there is a requirement that in order to make a FW Act unfair dismissal claim, the dismissed employee must have served a minimum employment period (MEP) of 6 months (or 12 months if the employer employs less than 15 employees). That is the case regardless of whether the employment contract includes a probationary or trial period.
If a probationary period matches the MEP, the exclusion of unfair dismissal laws lessens the legal exposure for you if you dismiss before the expiration of the MEP without a valid reason or warnings.
However, there are other ways that the dismissed employee can challenge the dismissal. For example:
- General protections application under 365 of FW Act e.g. the decision to dismiss was motivated by an activity or attribute of the employee proscribed as a reason for dismissal under the FW Act general protections provisions (e.g. the employee queried his or her pay or entitlements or made some complaint about his/her employment s 341(1)(c)(ii)). This means that when you decide to dismiss a probationary employee you should still formulate the reason for dismissal, verify that it is a lawful reason, and be in a position to prove that this was the reason).
- Breach of employment contract e.g. provisions in the employment contract entitled the employee to appropriate support and a reasonable opportunity to demonstrate suitability for ongoing employment (this means you should ensure that any probationary period clauses do not restrict your right to terminate employment during probationary employee).
- Misleading and deceptive conduct in contravention of s18 of the Australian Consumer Law e.g. you represented to the employee at the outset of employment that he/she would receive appropriate support and a reasonable opportunity to demonstrate suitability for ongoing employment (this means you should ensure that contract contains an ‘entire agreement’ clause to exclude reliance on pre-employment representations and ensure that such representations are not made).
Probationary employees enjoy the same rights and entitlements as non-probationary employees. They are entitled to all the FW Act National Employment Standard (NES) conditions, including paid annual leave, paid personal/carer’s leave and minimum notice periods.
Many probationary clauses provide a lesser notice period for termination of employment during the probationary period as opposed to after the expiration of the probationary period. However, the notice period for termination during a probationary period cannot be less than the minimum periods prescribed in the NES (one week for less than 12 months’ service).
Generally a probationary period will be for a period of three, six or 12 months. You can only extend a probationary period if the contract provides for that extension at the outset of employment, or the employee agrees to the extension at the time it is proposed. Remember, however, if once the probationary period goes beyond the expiration of the MEP, FW Act unfair dismissal laws will apply.
Stay tuned for Friday’s Bulletin – I’ll go over 5 important things you need to remember about the MEP.