What is a Probation Period?

When hiring employees for the first time, you might consider which employment practices to implement. As an employer, it is crucial that these practices will benefit both you and your employees. For instance, a probation period is a specified period at the beginning of an employment agreement that serves as a ‘trial’. This is beneficial for both you and your employee.

To help you better understand probation periods and if you should include such a term in your employee’s employment contract, this article will take you through everything you need to know about probation periods.

Probation

A probation period refers to a trial period for newly hired employees. Specifically, the purpose is to allow both you and your employee to decide whether to continue employment. Essentially, probation periods provide an opportunity for you to review employee performance. They can also discuss any possible issues and address these before the employment period continues.

Length of Probation

Probation periods can vary, and you as the employer are responsible for determining the length of the probation period. A probation period will usually occur in three, six or 12-month blocks, commencing from the first day of employment. To align probation periods with the statutory minimum employment period to be eligible for unfair dismissal, it is most common to utilise six-month probationary periods.

In addition, a probation period provides flexibility for you and your employee at the beginning of an employment arrangement. This ensures that if the agreement does not work out, there is minimal conflict.

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Employee Entitlements

Importantly, employees are entitled to the same benefits as all other employees during their probation period. This includes entitlements to annual leave and carer’s leave. 

Similarly, you are also entitled to the same rights during the probation period. This means that if an employee decides to resign during probation, they will still need to provide notice to leave. Again, you should outline the applicable notice period in the employment agreement or relevant industrial instrument.

Extending Probation

You can extend probation periods by agreement if the initial employment contract provides such a provision. In that case, you and your employee need to discuss and negotiate the terms of the probation extension. You may need to do this if you or your employee take time off during probation, and you need to add more time to make up for this.

End of Probation

At the end of a probation period, you and your employee will decide whether employment should continue. If an employee does not pass the probation period, they have the right to receive notice of the end of their employment. Further, you should pay them any unused paid leave.

Key Takeaways

A probation period refers to a trial period for newly hired employees. Importantly, during a probation period, you and your employee are entitled to the same rights as though they were a full-time employee. Some key things to know about employment periods is that they:

• allow both you and your employee to decide whether to continue with the employment agreement;
• usually last three, six or 12 months – with six months being the most common practice; and
• can be extended by agreement.

If you need assistance understanding probation periods, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

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