Extending a probation period – is it permitted?

Extending a probation period – is it permitted?

By Paul Munro on 14 December 2017 Can we extend a probation period if we are undecided about an employee's performance?

This question was recently sent to our Ask an Expert service.

Q Our contracts of employment still contain a clause regarding a probationary period. We have an employee who has almost completed the prescribed three-month probation period. The company is considering extending the probation period as management is still undecided about his work performance.

Can we extend a probation period? And, if the employee’s service proves unsatisfactory in the future, will he be able to claim unfair dismissal?

A The Fair Work Act does not refer to a ‘period of probation’ with respect to unfair dismissal law; it refers to a ‘minimum employment period’. This period is prescribed as six months (where the employer employs 15 employees or more) or 12 months (where the employer employs fewer than 15 employees).

The minimum employment period cannot be extended by agreement of the parties. Any term of a contract of employment which permits the extension of the minimum employment period would be invalid.

Once an employee has completed the relevant minimum employment period the employee has jurisdiction to apply to the Faor Work Commission to claim unfair dismissal.

As a probation period is designed to enable an employer and an employee to determine their suitability to a position, an employer may wish to continue to apply a probation period under this circumstance under their recruitment policy, although it may be prudent to have a term that allows extension of the probation period at the employer’s discretion.

However, an employee cannot access an unfair dismissal remedy unless he or she has completed the relevant minimum period of employment.

It should be noted that there is no minimum employment period prescribed by the Fair Work Act in relation to an adverse action claim under general protections provisions. Such a claim may be made to the Federal Circuit Court if the reason for dismissal, for example, is based on a discriminatory reason such as a temporary absence from work due to illness or injury.

The bottom line: The Fair Work Act does not refer to a probation period with respect to unfair dismissal law; it is called the minimum employment period and cannot be extended by the parties to a contract of employment.

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