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Probationary Periods - What Are They And What Happens When They Don't Work Out?

When engaging a new employee, it is common for an initial probation period to be included in the employment agreement.

The probationary period forms an important part of the recruitment and onboarding process as it provides an opportunity:

  • for both the employee and employer to assess the employee’s suitability for the role and fit within the company, and
  • for the assessment of a new employee’s work performance; and
  • to assess the employee’s demonstrated skills suitability for the position for which they were selected for.

The size of your business will determine the maximum probationary period length which can be applied. The maximum probationary period can be:

•           12 months for employers with 14 or less employees, or

•            6 months for employers with 15 or more employees. 

Supporting Employees During the Probationary Period

To help support an employee during their probationary period, there are a number of steps which can and should be taken by you as their employer. These steps include:

  • Establishing clear performance expectations so as to provide certainty as to what it is that the employee needs to achieve during the probationary period.
  • Checking in with the new employee on a regular basis to understand how they are going and progressing.
  • Providing a mentor or a buddy to support the new employee with settling in and getting used to the culture and working environment.

Completion of Probationary Period

Where the probation period has been completed successfully, it is best practice to:

  • meet with the employ to confirm with them that their employment will continue beyond the probationary period.
  • provide the employee with written confirmation that they have successfully completed their probationary period.

In circumstances where it is determined that an employee will not successfully complete their probationary period, as an employer you will need to:

  • schedule a meeting to advise the employee that their employment will not be continuing.
  • provide the employee with notification of their termination in writing.
  • provide the employee with notice of their termination as per the NES or applicable award, and
  • pay out any unused accumulated annual leave hours.

On occasion, as an employer you may find that as an employee nears the end of their contracted probationary period, you have not yet made up your mind as whether to offer the individual ongoing employment.  In such situations, you may be able to extend the probationary period for a further period. Any decision to extend an employee’s probationary period must be discussed with the employee and be confirmed in writing.

It is important to note that as an employer, you do not have to wait until the end of the probationary period before taking action. Rather, the decision to terminate the employment relationship can take place at any time within the probationary period. You do however need to be aware that terminating an employee in any circumstance may potentially expose your business to an element of risk, this includes during the probationary period.

Although employees who are terminated within their probationary period would not meet the eligibility requirements to lodge an unfair dismissal claim, they would be able to lodge a general protection claim.  General protections are intended to protect workplace rights, protect freedom of association, provide protection from workplace discrimination or other unfair treatment.  As such, prior to terminating an employee during their probationary period, it is recommended that the employee be made aware that they are not performing and be provided with the opportunity to improve. 

Prior to terminating an employee within their probationary period, it is recommended that you contact a member of our HR Advice team at advice@hradviceonline.com.au or 1300 720 004 so that we can assist you with minimizing any potential areas of risk.

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