But They're on Probation? Probationary Periods, Termination Risks and Written Requirements for a Business

When conduct or performance issues arise with new employees, members will often reach out to MTA to discuss options around management and/or termination.

In turn, one of the most common responses we are likely to receive is:

"But why do I have to follow a process? Aren't they on probation?"

Whilst probation does allow for greater flexibility in assessing an employee's suitability for their position, it is important to note that it does not provide a blanket shield to employers, and businesses that don't undertake the proper level of diligence at the probation stage may leave themselves open to further action by employees.

Just What Is Probation?

'Probation', as most employers and employees understand it, is the period of time between when employment commences and a set date, where the employer (and the employee) can assess if they are suitable for continued employment.

However, from a legal standpoint, probation actually refers to the period under section 382 of the Fair Work Act where an employee is unable to access the remedy of unfair dismissal.

Interestingly, it also changes depending on the size of a business:

• For a business with 15 or more employees: Probation ends six (6) calendar months from the commencement of employment.
• For a business with less than 15 employees: Probation ends twelve (12) calendar months from the commencement of employment.

Note: The above employee count can sometimes take into account company owners who are receiving wages and/or businesses that have associated businesses with the main business.

What About Their Contract?

A probation period under contract may be of relevance for evidence, especially where a termination occurs, but it is NOT the enforceable period of probation. Whether a longer or shorter probation period is applied to an employee, access to unfair dismissal applies at the applicable point, regardless of any contract provisions.

So What's the Risk?

Unfair Dismissal v General Protections

Unfair Dismissal

Unfair dismissal is essentially a claim under law by an employee that a dismissal:

• Was harsh, unjust or unreasonable; or
• Was a non-genuine redundancy within the meaning of the Act.

The benefit of probation from an unfair dismissal standpoint is that the termination does not have to involve significant or involved disciplinary processes/performance processes for the dismissal to be valid under law.

General Protections

General protections, on the other hand, apply from the commencement of employment (and in some rare cases during the pre-employment phase) and involve an employee alleging that their employment was terminated, or otherwise significantly impacted, due to one of the following:

• A Protected Characteristic (i.e. age, race, sexual orientation/identity, religious belief); or
• Exercising a Protected Workplace Right (Taking an authorised sick or leave day, joining a union, raising bullying and harassment, underpayment claims, etc.)

The above list is not exhaustive.

Why Does It Matter?

Broadly speaking, most claims that arise in the Fair Work Commission impose a reverse onus of proof; that is, the employer, not the employee, is required to prove the basis for termination and that it fits within the scope of the law.

For probation, this means that whilst you don't necessarily have to undertake the same steps that you would to challenge an unfair dismissal claim (proof of disciplinary process, performance management process, etc.), you still need to be able to prove that the termination was for something other than a protected characteristic or workplace right.

What Should a Business Do?

Even during probation, it is vitally important that a business:

• Keep records, including of important management instructions.
• Undertake appropriate processes (such as disciplinary processes), even where not strictly required.
• Have appropriate policies and procedures in place (including for things such as absenteeism, sick leave, etc.).
• Record any meetings with an employee in writing and provide a copy of this to the employee.

Small steps such as the above will provide you with a greater chance of responding to a general protections claim.

Steps like these will also provide you with a stronger basis for defending any future claims that may arise when probation ends. For example, defending an unfair dismissal claim based on termination for escalation of warnings works better if proper process is followed from the outset, even where not required.

In summary, probation should not be viewed as an all-encompassing protection for employers, and prudent businesses should take proper care to ensure that they are implementing and applying proper processes before, during and after probation.