We often speak with clients about extending the probationary period of their employees. Is this legal, and, if so, under what circumstances? What is probation anyway? If you have an employee who just hasn’t performed in their probation, but you’re not quite sure whether you’ve given them enough time, you may be able to extend the probationary period. For those who do not know what a probationary period is, it is a period during which the employee and employer may assess each other and the role. If either party, for whatever reason, is not satisfied, they may end the employment relationship, provided they do so within the probationary period.
This means that during this initial probationary period, an employer may end the employment of the employee for any reason and not have to worry about having to defend any claims of ‘unfair dismissal’.
Interestingly, the provisions of the Fair Work Act 2009 (Cth) stipulate that employees are not entitled to make unfair dismissal applications if:
- For business with less than 15 employees – the employee has not worked at least a year at the business; or
- For business with 15 or more employees – the employee has not worked at least 6 months at the business.
This means that although some employment agreements will stipulate probationary periods of only 3 months, technically speaking, new employees cannot make unfair dismissal claims if they haven’t already been working for 6-12 months, depending on the size of the business.
In these situations, there would not be much sense in extending the probationary period, as the provisions of the Fair Work Act would typically apply.
Can I extend the probationary period even further?
The question becomes: Can an employer set a probationary period that exceeds the time frames established in the provisions of the Fair Work Act? The answer is yes, you can. But it would serve no purpose when the Fair Work Act establishes the minimum required time working before an unfair dismissal claim is made. In other words, because the legislation always overrides employment agreements, an employer would be at risk of an unfair dismissal claim if they terminated someone after that period.
The provisions of the Fair Work Act will trump the terms of any employment agreement. Businesses with fewer than 15 staff have one year to assess the appropriateness of new employees, whereas those with 15 or above have 6 months to make the same assessment. While unfair dismissal claims will not be accepted within this time frame, claims of unlawful termination will. Unlawful termination refers to termination based on a prohibited reason, such as race, gender, pregnancy or religion. These provisions will apply regardless of how long a new employee has been employed.