Probation at work

Probation at work is a lawful entitlement right? Well…not exactly.

What is probation?

Probation periods are often implemented at the start of the employment relationship. They give an employer and employee an opportunity to confirm that the worker is suitable for the role they’ve been hired to do.

During the probationary period, either the employer or the employee can make a decision whether to continue with the employment relationship or bring it to an end.

Length of probation

An employer decides on the length of the probation period. It often ranges from 3 to 6 months, beginning from when the worker starts employment.

Employee entitlements during probation

While on probation, employees continue to receive the same entitlements as someone who isn’t in a probation period. This includes the entitlements in the National Employment Standards.  

If hired on a full-time or part-time basis, an employee on probation is entitled to accrue and access their paid leave entitlements, such as annual leave and sick leave.

If an employee doesn’t pass their probation, they are still entitled to:

• receive notice when employment ends
• have their unused accumulated annual leave hours paid out.

Despite probation being a widely accepted term associated with employment, the Fair Work Act 2009 (the Act) does not use the term ‘Probation.’ Instead, it mentions a minimum employment period (MEP), during which an employee is excluded from bringing in an unfair dismissal claim whether or not they have undergone a formal probation. The MEP is 12 months for employers with less than 15 employees and six months for employers with more than 15 employees.

Probation myth #1: a Contract of Employment must contain a probation clause

Probationary periods are not specified under the Fair Work Act 2009 and there is no statutory basis that entitles an employer or an employee to a probationary period.

Probation myth #2: an employer can dismiss a worker during probation for any reason

There is a common misconception that probationary periods allow an employer to dismiss an employee for any reason (or for no reason at all) prior to the end of the defined period. This is not necessarily the case.

Can a probationary period be extended?

As a rule, an employer can only extend a probation period if the contractual arrangements in relation to the probation period would allow the employer to do so. An employer may also extend the period by agreement between the employer and worker.

Extending a probationary period will not subsequently extend the protections provided to employers under the Fair Work Act. Once the employee has served the relevant minimum employment period, they will be eligible to submit a claim for unfair dismissal, despite still being on probation.

Key takeaway for employers? The minimum employment period set out in the Fair Work Act will apply to an employee and employer irrespective of any contractual provisions relating to probationary periods. This becomes particularly important if an employer wishes to extend an employee’s probation beyond the minimum employment period.

Need more info on probation at work and how you can word your Contracts of Employment in a manner that best protects your business? Give us a call or shoot us a message through our “Contact Us” page. While you’re in the mood for clicking on links, check out the Bare Bones LinkedIn and Facebook pages: lots of free tips on what you can do to get the best from your people.