Probation periods for new employees

A man in a red suit pushes a two-wheel trolley with office furniture and equipment stacked on it.

Probation periods for new employees

A man in a red suit pushes a two-wheel trolley with office furniture and equipment stacked on it.

When a person begins a new job, it is common for their employment to be subject to a probation period. Here is a closer look at the ins and outs of probation periods as well as an employer’s scope to terminate employment during them.

What is a probation period?

The term ‘probation period’ refers to the initial months after a new employee has been hired, during which both employer and employee are given the chance to evaluate whether the working relationship is right for them.

From an employee’s perspective, this period allows them to see whether the role fulfils their expectations.

From an employer’s perspective, it’s an opportunity to assess an employee’s true skills compared to those they claimed in their resume and during the recruitment process and to consider whether the employee is the right fit for the business.

At any stage of the agreed probation period (usually between three and six months in duration), either employer or employee may choose to terminate the employment relationship should things not be progressing as expected.

A common misconception about terminating employment during probation periods is that there is no obligation to give a minimum amount of notice as per relevant legislation or industrial instrument; that is, the Fair Work Act 2009 or the relevant modern award—in this case, the Health Professionals and Support Services Award 2020.

While an employer may choose to include a provision in an employment contract that requires a greater amount of notice following probation, they must ensure that the employee receives no less than the minimum amount of notice included in the National Employment Standards or the Health Professionals and Support Services Award 2020 (as appropriate) regardless of whether the employee is on probation or not.

When and why can an employee be dismissed during probation?

As probation essentially acts as a trial period for an employment relationship, there is a common misunderstanding that an employer can let an employee go without the need to evaluate and address poor conduct and performance.

While it is true that there is less of a strict obligation for an employer to follow a thorough performance management process during an employee’s probation period—primarily because an employee cannot make an unfair dismissal claim until they have at least six months’ continuous service with their employer—this does not mean it is advisable for an employer to dismiss an employee during their probation without any prior indication or warning.

(Employees of small business employers—those with fewer than 15 employees—do not gain access to unfair dismissal until they have at least 12 months’ continuous service.)

Firstly, it sets a poor tone from an employee morale perspective.

Other employees working for your business may observe that management doesn’t promote a culture of open communication and fear that if they experience similar issues, they may also be subject to disciplinary measures, including termination, without any prior notice.

This can lead to issues such as lack of trust, poor relationships and even decreased productivity.

Secondly, unfair dismissal claims are not the only avenue open to employees who believe they have been wrongfully dismissed.

If an employee is terminated during their probation period, they may explore other legal avenues to challenge that termination.

In essence, dismissing an employee without any performance counselling during their probation period may not prevent your business from being subject to legal issues.

This reinforces the fact that employment can only be terminated for a genuine reason during a probation period.

Specifically, an employee cannot be dismissed in their probation because of a discriminatory reason or because they exercised a workplace right (such as taking leave they were entitled to as per the National Employment Standards).

So, what should be done to manage performance during a probation period?

It is recommended that employers create opportunities for regular, ongoing feedback throughout an employee’s probation period.

This may involve:

  • scheduling weekly, fortnightly or monthly catch-ups
  • organising a mid-probation check-in
  • appointing mentors for new starters who will coach them throughout their probation.

If an employee is not meeting expectations during probation, this will ensure that they have been made aware of the need to improve and afforded genuine support to raise their performance.

While employers have less of a requirement to engage in a comprehensive performance management process with an employee who is underperforming during their probation period, it is best practice to provide regular feedback to that employee to help overcome performance issues if possible.

This will also limit legal risk should the employment relationship eventually be terminated.

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