We investigate some of the most common questions regarding probationary employees. By Emma Watt
Does being on probation make a difference to an employee’s access to unfair dismissal claims?
The answer to this common question is that agreement between the employer and employee on a role’s probationary period has no impact on whether a dismissed employee can make a claim asserting they were unfairly dismissed.
Instead, in order to be able to access the unfair dismissal jurisdiction, the employee must have served a ‘minimum employment period’ or MEP. This MEP is generally six months or, for an employee of a business with fewer than 15 employees, 12 months.
This doesn’t prevent an employee from making an application to the Fair Work Commission, but it does give an employer the opportunity to assert that the employee does not have access to the jurisdiction.
Dismissal does not take effect until notice of termination has been communicated to the employee. So, if a letter terminating employment is posted to an employee before the MEP expires but is received by the employee after the MEP has expired, the dismissal will not have taken place within the MEP, and the employee would be eligible to make a claim.
If you are going to dismiss an employee before the expiry of the MEP, make sure it is clearly done within either six or 12 calendar months (whichever MEP is relevant). Ensure you have an accurate record of the employee’s start date as well – this has tripped a few employers up in the past.
The MEP includes any period of casual employment that was on a regular and systematic basis, during which the employee had a reasonable expectation of continuing employment.
A casual employee who commences work for you at least once a week (roughly), has a reasonable expectation of being offered work on a regular and systematic basis, and who is dismissed outside the MEP will be eligible to make an unfair dismissal claim.
Whether it’s warranted is another matter altogether, but you could be required to defend the claim.
How much notice of termination of employment should I give a probationary employee?
I frequently come across contracts of employment that state that an employer is not required to give a probationary employee any notice, or the notice required is one day. These contracts are not enforceable, because the notice period in the National Employment Standards (NES) applies to every employee in Australia, regardless of the provisions of a written contract between the employer and the employee.
The NES requires that a full-time or part-time employee with less than 12 months’ service be given one week’s notice, or one week’s pay in lieu of notice. This includes probationary employees – so the minimum notice would be one week, even for someone who’s been with you for only one day.
Should I give warnings or reasons for dismissal to a probationary employee?
If the probationary employee is still within their MEP, then there is no requirement that you give a valid reason for termination, and you are not required to give warnings either.
However, even if a probationary employee can’t make an unfair dismissal claim, they could still potentially claim that adverse action has been taken against them for a prohibited reason, such as discrimination, or being off work sick. Giving a probationary employee a written warning that their employment is at risk, and ultimately a reason for their termination, could help you defend your business against an adverse action claim.
Employees can make adverse action claims even if they’ve not even started work for you yet, and certainly after only a short period of employment. These claims can be tricky to defend – so it’s in your best interests to give written warnings and reasons when disciplining or terminating probationary employees.
Are employees on probation entitled to annual leave or personal/carer’s leave?
A long time ago, employees who had only worked for you for a short time had limited access to annual leave and sick leave. That has not been applicable since 2010.
Under the NES, employees accrue both annual leave and personal/carer’s leave (sick leave) on a pro rata basis from their first day of employment. Probationary employees may use both annual leave and personal/carer’s leave in accordance with the provisions of the NES, and provided they comply with your company policies about taking leave.
In particular, you are entitled to set and enforce reasonable requirements for notifying you about taking personal/carer’s leave, and for providing evidence to support the need for the leave.
Both annual leave and personal/carer’s leave accrue in line with how many ordinary hours an employee has worked for you, so the reality is that a probationary employee is unlikely to have much of either type of leave accrued during the first few months of employment. They may take leave they have accrued, but any time off in excess of the accrued leave would be leave without pay.
Can I extend a probationary period if I’m unsure whether I want to continue with employment?
For most people, a probationary period will be for a period of three or six months. If your probationary period is longer than the MEP that applies to your business, the existence of the probationary period will not protect you from unfair dismissal claims.
You can extend a probationary period if the contract provides for that extension at the outset of employment, or if the employee agrees to the extension at the time it is proposed. A good reason to do this is to provide a structure for a performance management plan that could subsequently be used to prove that you notified the employee of their deficiencies and warned them that their employment was at risk of being terminated.
The end of the MEP, whether it is six months or 12 months, is a hard deadline for when an employee has access to the unfair dismissal jurisdiction. The existence of the MEP is no barrier to adverse action/general protection claims.
What use is a probationary period?
Almost no use whatsoever, in terms of protecting you from claims surrounding an employee’s employment or dismissal.
However, a well-constructed probationary period can help you make an employee feel welcome and provide a formal process for identifying gaps in skills and knowledge at an early stage of employment. This is the best use for a probationary period!
Emma Watt is an independent industrial relations consultant who has, for more than 20 years, provided advice and assistance to employers in the timber industry. She has also worked as an unfair dismissal conciliator with the Fair Work Commission. Emma is very keen to ensure that employers know their rights and obligations, so they can sleep well at night!