Are employees required to have a probationary period?

In most instances, when offering employment to a new employee, employers have an expectation that the person selected is not only the best fit for the job but, that they will become a high performing and eventually, long-standing employee. However, this is not always the case and having a probationary period can be a useful tool to identify potential issues early in the piece.

A probation period is an optional term of employment, during which an employer assesses whether an employee has the necessary skills and experience to perform effectively in the role and business. Probationary periods are not specified under the Fair Work Act 2009 (Cth) (FW Act) or the Industrial Relations Act 1979 (WA) (IR Act). This means, in order to implement a probationary period for a new employee, it must be specified in their employment contract. In addition, if an employer is unsure of the employee’s performance or conduct, and wishes to extend their probation period, they can only do so if there is an expressed provision for this in the contract of employment. Depending on the type of role, a probationary period may be for as little as a couple weeks, or up to six months or longer.

Under the FW Act, which applies to national system employers and their employees, probationary periods have little weight as a valid reason for dismissal, due to unfair dismissal and general protections provisions. For example, section 383 of the FW Act requires an employee to serve a minimum employment period, before they are eligible to submit an unfair dismissal claim. This section provides businesses with 15 or more employees, protection from unfair dismissal claims during an employee’s first 6 months of employment, whereas, businesses with fewer than 15 employees are protected for the first 12 months of employment. Extending a probationary period will not subsequently extend the protections provided to employers under the FW Act. Once the employee has served the relevant minimum employment period, they will be eligible to submit a claim, despite still being on probation. As there is no minimum employment period for a general protections claim, a probationary period will not prevent an employee from submitting a claim for unlawful dismissal.

Under the IR Act, which applies to state system employers and their employees, there is no minimum employment period for an employee to submit a claim for unfair dismissal. However, under section 23A(2) of the IR Act, the Western Australian Industrial Relations Commission is required to consider whether, at the time of dismissal, the employee was on probation and employed for less than 3 months. This does not provide an automatic protection, but unlike under the FW Act, probationary periods under 3 months are genuinely considered when determining if a dismissal is unfair.

It is recommended that employers (in both the national and state systems) apply a fair process when managing employees during their probationary periods. This may include; both informal and formal notification of poor performance or conduct, providing a right of reply and, in some circumstances, the opportunity to improve, as well as following any relevant policies and procedures. Employee’s will also be entitled to the minimum period of notice, as prescribed by the relevant industrial instrument, if dismissed during their probationary period.

Like to know more? Contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or email advice@cciwa.com

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