The probationary period provides both employers and employees with an opportunity to assess the suitability of the employment relationship and decide if ongoing employment is appropriate.
A probationary period is a clause in a permanent employee’s contract that enables their employment to be monitored or ended more easily to ensure they meet the requirements of the role. Probationary periods allow employers to continually monitor and assess the first three to six months of employment to assess suitability.
Termination during the probationary period
If a new hire is found to be unsuitable during the probationary period, for example, due to inability to complete the role, poor performance or inappropriate conduct, the employee can be terminated more easily than longstanding employees.
However, probationary periods are not a ‘free pass’ to terminate new employees without consequence. It is important to follow due process and provide procedural fairness to employees who do not successfully complete probation.
The probationary period is different to the minimum employment period, which is the length of time an employee needs to be employed before they can lodge an unfair dismissal claim. Under the Fair Work Act, the minimum employment period is six months for an employer with 15 or more employees and 12 months for an employer with fewer than 15 employees.
Some employers believe that because employees terminated during probation cannot lodge an unfair dismissal claim there is no need to document a reason for dismissal or follow the formal procedure when terminating during probation.
While employers are not obliged to provide reasons for dismissal if terminating during the probationary period it is recommended to do so otherwise it may leave employers exposed to general protections/adverse action claims. Documenting reasons for termination and the termination process is the best way to defend potential future claims.
Other claims that employees could raise if they feel they have been mistreated or dismissed unlawfully include discrimination claims under Anti-Discrimination Legislation or general protections claims under the Fair Work Act.
Employees may pursue a general protection/adverse action claim if they feel they have been terminated because they had or exercised a workplace right or for a discriminatory reason. These claims can be riskier for employers as they bear the onus of proof and the expense of legal proceedings and damages can quickly escalate.
How employers manage the dismissal process can also influence employees motivation to pursue claims, such as the desire to make a point or have a sense of justice, so care should be taken to not leave employees feeling as though they have been treated unfairly.
How to do it well
Probationary periods are intended to provide all parties time to assess the suitability of the employment relationships and are typically three to six months in duration. If a new employee is not suitable, documentation should be kept as evidence.
To terminate an employee during probation:
- Meet with the employee to provide details of areas that are unsatisfactory (e.g. evidence of underperformance) and allow them to respond.
- Consider the employee’s response and decide if termination is appropriate.
- Write to the employee, confirming their termination and include the reasons for termination, any warnings or meetings held to discuss the issues and money to be paid out.
- Employees on probation must have at least one weeks’ written notice of termination.
It is important to always state the reason for the termination in writing. This reason must be related to either the employee’s performance or conduct. This ensures that employers are best prepared to defend any claim that may arise from the termination of employment.
If a new employee is not performing appropriately raise these issues during the probationary period. One uncomfortable conversation can save you months or years of stress in the future. Bottom Line: it is easier for employers to release employees during probation, however they need to do so lawfully and provide justification.
ProcessWorx Advisors have experience terminating employees correctly. If you have queries about anything above and want advice personalised to your business, contact us on (08) 9316 9896, or email firstname.lastname@example.org.