Probation is a universal practice in Australian workplaces; however, many employers are not aware of the implications of Probation in Australian law. Probation is an important aspect of the employment relationship but can often be misunderstood and getting it wrong can be costly for employers.

This article provides employers with a greater understanding of the principles of Probation and the pitfalls of termination during Probation.

What is Probation?

The Fair Work Act 2009 (‘the Act’) does not provide a definition, nor an explanation of Probation; however, this does not mean that there is no such thing.

Probation is a period of time that gives both employers and employees an opportunity to assess a new employment relationship, and importantly for employers, the time to decide whether the employee is suitable for the role they have been hired for.

It is important to note that the concept of Probation is not a legally defined one, and therefore provides no legal protection. This is distinct from the concept of the Minimum Employment Period (‘MEP’) which is defined in the Act as a protection from a former employee making an Unfair Dismissal application in the Fair Work Commission (‘FWC’).

How long should Probation be?

A Probation Period can be as long or as short a period as determined by the employer.

Generally, probation periods are linked to the MEP timeframes in the Act. Therefore, a six month duration is the most common Probation period in most businesses, with a 12 month Probation period suitable for Small Business Employers with 14 or fewer employees.

As mentioned, these periods are reflective of the MEP an employee needs to be employed to be eligible to be able to progress an application for an Unfair Dismissal claim in dispute of their termination.

This does not mean an employee can be terminated at any time for any reason during the Probation period and not face recourse from the terminated employee.

Is Probation essential?

Probation periods are not essential. As mentioned earlier they have no legal strength (given it is the MEP that is important to protection from an Unfair Dismissal claim.

The MEP used to be called Probation, however this has not been the case for many years, which has resulted with the concept of Probation now being quite distinct from being a protection like the MP now is.

Despite this, a Probation period reinforces to the new employee that:

1. There is an initial period in which their suitability for the position they have been employed in is being assessed; and
2. Their ongoing employment is subject to successful completion of the Probation period.

Completion of Probation

Upon the completion of an employee’s Probation period, there will be no changes to the conditions of their employment. This is because the probation period in itself does not impact the rights and obligations under legislation.

However, once an employee completes their six-month Probation period (for example for a business that is not a small business), they will now be eligible to make a claim for an Unfair Dismissal, meaning employers will need to engage in due process when initiating a termination process.

Probation Tips for Employers

1. Set a Probation period that is in line with the MEP.
2. During the Probation period, hold meetings with the employee to discuss any concerns around performance and conduct.
3. Set clear expectations of performance and conduct with new employees and maintain a consistent approach with all employees.
4. Keep records of meeting outcomes and meeting minutes for all Probation discussions.
5. Should a decision be made to not continue employment during or beyond the Probation period, it is important to meet with the employee and confirm that their employment will not continue and provide written confirmation. Remember that termination should only be based on performance, conduct or capacity to represent a valid reason.
6. Do not terminate an employee during a Probation period for a non-valid reason.
7. Avoid terminations during Probation periods that can be perceived as being discriminatory or connected to an employee’s exercise of a workplace right.
8. Consider whether providing payment in lieu of notice is necessary for avoiding problematic situations that can arise from an employee working out their notice period.
9. Remember to pay an employee their accrued annual leave even if they are terminated during their Probation period.