Does Probationary Period Count Towards Continuous Employment

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What is a Probationary Period?

A probationary period is a period of time at the start of a permanent full-time or part-time employment relationship that gives the employer the opportunity to assess whether their new employee is capable, reliable and suitable for the job. If the employee is not suited to the role, there are less obstacles to terminating the employee.

Generally, the employer decides the length of the probationary period in the employment agreement, but an award or registered agreement may provide otherwise. A probationary period is not a separate period of employment. New recruits on probation receive the same entitlements as permanent full-time and part-time employees.

Probation and the Fair Work Act

The Fair Work Act 2009 (the Act) does not use the term 'Probation.' It is a contractual term and there is generally no law covering what is and isn't a "probation period". Probation refers to a trial period at the start of a full-time or part-time employee's employment that is generally set out in their employment contract.

The Act refers to a Minimum Employment Period which is determined by the amount of time the employee has worked in the business and the size of the business. If the employee has met the minimum employment period the employee will have access to unfair dismissal which is the minimum period that an employee must be engaged for before they may have access to an unfair dismissal claim if you terminate their employment.

For a small business with less than 15 employees this is 12 months, otherwise it is six months. During the minimum engagement period an employee may be terminated subject to written notice as in accordance with the relevant provisions of the NES, industrial instrument or contact.

Performance Management During Probation

During the probation period you may consider holding regular meetings with the employee to review the employee's performance. This is so you can give your employee the necessary support. It also provides an opportunity to fix any problems or raise concerns on either side. If the employee knows what is expected of them and how to go about doing their job, it gives them the best chance of passing probation successfully.

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Employee Entitlements on Probation

It is extremely important to remember that employees on probation still have the same entitlements as full-time or part-time employees who are not on probation, so they can accrue and access paid leave.

If an employee does not pass their probation, they are entitled to receive notice in writing of their employment ending and be paid out any accrued unused annual leave hours as part of their final pay.

If the probationary period is less than six months, or 12 months if you are a small business with less than 15 employees at the time of dismissal, the employee will not be able to succeed in the event of an unfair dismissal claim.

An employee may be able to initiate a general protections claim regardless of the length of their employment if the dismissal is due to discrimination based on race, age, gender and other such attributes, or because the employee exercised a workplace right, for example. For this reason, it may be prudent to seek formal advice from an employment relations professional or legal practitioner prior to termination of an employee.

Extending the Probationary Period

If you are unsure whether a new employee is suitable for the job, but you are not ready to dismiss them yet, then you may want to extend their probation period.

Technically speaking, you are allowed to do this by agreement or if the terms of the employment agreement give permission. However, you can only extend the probationary period by whatever set amount of time is stated in the contract.

For example, if you put an employee on probation for six months and the agreement let you extend the period by an extra three months, then you would be allowed to do so under those conditions.

Bear in mind that if you extend the probation period beyond the minimum employment period and then dismiss the employee, they may have access to unfair dismissal if the probation period extends beyond the minimum engagement period of 6 months, or 12 months for small business employers.

Minimum Period of Employment

If you choose to dismiss an employee on an extended probation period, and that employee has worked long enough to surpass the minimum employment period of six months (or 12 months if you are a small business) they will be entitled to make an unfair dismissal claim against your business if the circumstances warrant it.

The size of your business dictates how long an employee has to work for you before they can make an unfair dismissal claim. If the business has less than 15 employees, the employee has to work at least 12 months. If the business has 15 or more employees, the employee only has to work at least six months to have access to an unfair dismissal claim.

A business is a small business, depending on the amount of employees employed at the time of the dismissal, which includes:

• The employee and any other employees being dismissed at that time
• Any regular and systematic casual employees employed by the business at the time of the dismissal (so not all casual employees)
• Any employees of associated entities, including any based overseas.

So in some cases, choosing to extend the probationary period of an employee may serve no purpose, as the employee will have surpassed the minimum employment period and will have  access to an unfair dismissal claim  In this case additional steps need to be taken to dismiss the employee.

Resigning While on Probation

There may come a time where an employee on probation decides to resign. This may occur if they decide the job is not for them, they are unhappy with the workplace environment, or they have been given a better job offer elsewhere.

Whatever the reason, the departing employee should give notice of their intention to leave, because they have the same responsibilities as a full-time or part-time employee. The length of the notice period will depend on the terms of their employment agreement or the relevant award or registered agreement. The employer should pay out any wages owing, and any unused annual leave, and notice (if applicable) as part of the employee's final pay.

Employsure can help you understand probationary periods. Call us for free initial advice on 1300 651 415.

What Happens at the End of the Probationary Period?

Before the probationary period ends, you should meet with the employee and let them know whether they have passed probation. If they are unsuccessful, you can extend their probationary period if the contract, award or registered agreement allow for it or end their employment.

If you are ending their employment, it may be considered best practice to meet with the employee to provide feedback about their performance or conduct and explain why the probation period was unsuccessful.

Under the National Employment Standards set out in the Fair Work Act 2009, you need to give an employee written notice to end his or her employment.

The written notice should specify the period of notice given (or payment in lieu of notice), and the date the employment will end.

Always confirm the outcome of the meeting in writing to the employee. Whether they are successful or unsuccessful and whether you are extending the probation or are terminating their employment. Keep a copy as well as a written record of the discussion during the meeting.

Call our 24/7 Advice line to ask any workplace related questions.

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Frequently Asked Questions

• How Long Is Probation Period In Australia?

  The employer generally determines the length of the probation in the employment agreement unless the applicable award or registered agreement provide otherwise, but it is usually three or six months, depending on the nature of the role.

• What Happens At End Of Probation Period?

  Towards the end of the probation period the employer should meet with the employee to discuss their performance over the probationary period and let the employee know whether the employer chooses to

  • Extend the probation period
  • Confirm that the employee has passed probation
  • Terminate the employee

  Whatever the outcome is, the employer should confirm it to the employee in writing.

• How Many Times Can A Probationary Period Be Extended?

  Technically as many times as the employment contract allows. Extending probation multiple times may have a detrimental effect on employee morale and productivity. If you have met with an employee during their probationary period and actively tried to resolve any issues to no avail, you may want to consider taking steps to terminate their employment.

• Do Employees Get Paid During Probation Period?

  Yes. An employee on probation has the same entitlements as a permanent full-time or part-time employee but may not have access to unfair dismissal if terminated, depending on their length of service and the minimum engagement period that applies to the business.

• Can You Dismiss Someone During Their Probationary Period?

  Yes, you can, depending on the circumstances. If the employee has not met the minimum engagement period you can meet with the employee to terminate their employment, but you must give them notice of the termination in writing. If they are outside the minimum engagement period, an additional process will be required.

  To avoid any risks to your business call us for free initial advice on terminating an employee outside of the minimum engagement period.

• Can Employees Quit Without Notice During Probation Period?

  No. Employees who resign during their probation period are still required to give the amount of notice required in their employment contract, applicable award or registered agreement.

• What Is The Minimum Employment Period?

  The minimum employment period is the amount of time an employee must be employed within a business before they have access to unfair dismissal. Employees engaged by small business employers must be employed for at least 12 months before they have access. Otherwise employees must employed for at least six months before they can apply for unfair dismissal if the circumstances warrant it.

• What Is The Difference Between Probation And The Minimum Employment Period?

  Probation is not a concept contained in the Fair Work Act. Probation is usually determined by the employer in the employment agreement or provisions in the relevant award or registered agreement and refers to a trial period at the start of a full-time or part-time employee's employment. The minimum employment period is set out in the Fair Work Act and is determined by the amount of time the employee has worked in the business and the size of the business. If the employee has met the minimum employment period the employee will have access to unfair dismissal.

• Do Probationary Employees Have Rights?

  Employees who are on probation have the same entitlements as a permanent full-time or part-time employee in that they accrue and can access paid leave. However, an employee who has not met the minimum engagement period and who is dismissed during the probationary period will not have access to unfair dismissal.

• Is a Probationary Period Needed For New Role In The Same Company?

  No. The total length of service (time worked) with the company will determine if the employee has access to unfair dismissal. However, if the employee starts a new role you are not sure they are suited to, then you can agree to a temporary variation of their existing employment contract for a specific amount of time to see how they progress in the new role, which allows them to return to their old role at the end of the time period if not successful.

  If the employee has been employed with the Company for longer than the minimum engagement period, then the employee will have access to unfair dismissal and terminating their employment will require a valid reason and a procedurally fair process.

  To avoid any risks to your business call us for free initial advice on terminating an employee outside of the minimum engagement period.

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Source: https://employsure.com.au/guides/hiring-and-onboarding/probationary-period/

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