Probation/trial period - some issues for employers

Analysis

Probation/trial period - some issues for employers

A common feature in federal/state employment legislation and industrial instruments is reference to probation period's applying to new employees.

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A common feature in federal/state employment legislation and industrial instruments is reference to probation period's applying to new employees.

A probation period is usually required to be provided in advance of the employee commencing work with the employer. There is a 'standard' (but not fixed) period of three months. However, note that the length of the probation will generally be proportionate to the seniority of the position. This is recognised in unfair dismissal legislation, in that a probation period in excess of three months may be reasonable having regard to the nature and circumstances of the position and the business.

Purpose

The probationary period serves a number of purposes. From the employer's perspective, a probation period is to test the employee's fitness and suitability for the position. It is also a period of training and a time for criticism, assessment and adjustment to standards of performance and conduct.

On the other hand, the employee can make an assessment of whether the position is really what was expected and, if not, to resign.

A fixed probation period does not necessarily require an employer to keep an employee in employment for the whole of that period if it is clear, on reasonable grounds, the employee is not satisfactory.

Other terms used

Many enterprise agreements and contracts of employment may use other terms to describe a 'probation period'.

These may include 'trial period', 'orientation period', or 'qualifying period'. Industrial tribunals have looked at the dictionary definitions of these terms and concluded there was generally no difference in the nature of the period.

These terms are generally describing the same scenario i.e. a period during which the ability of the employee to perform in a position:

  • which can be monitored, tested or trialled;
  • where the employee is inducted or trained; before
  • a final decision on continuing or ongoing employment is made by the  employer.
Change of employment category

An employer may prescribe a new probation period for an employee hired as a permanent employee who was previously employed by the same employer as a casual employee. This could occur provided the arrangements under which the employee worked as a casual are clearly different.

Where a new contract of employment is created to reflect the permanent work and it prescribes a probation period, this would appear to be valid as the parties have negotiated a 'new arrangement'.

New employer

Industrial tribunals have found that it was not unreasonable for the new employer (taking over a business) to require all new employees be placed on a probation period. For example, the AIRC has determined an employee who was dismissed for poor performance during the 'new' probation period argued unsuccessfully they had already served under a probation period with the previous employer and the imposition of the new probation period was unfair.

Reasonable probation period

A maximum of three months is generally regarded as an acceptable period for an employee to be on probation.

A longer period of probation may be appropriate under certain circumstances, however, the onus is on the employer to justify the longer period. The most important consideration will be the nature of the job. It may also be relevant to consider the employee's previous experience, training and employment in assessing the entire circumstances of the employment.

Extending the probation period

Once a probation period has been determined at the commencement of employment it cannot be extended once employment has commenced.

A common reason for an employer wishing to extend a probation period is an employee's prolonged absence from work due to sickness or accident during the probation period. Industrial tribunals have determined that the option for extending the probation period must also be determined in advance of the employee commencing employment.

Probation can be extended provided the maximum possible period of probation is determined in advance. So, for example, the arrangement may be 'the equivalent of three months actual attendance at work - but no longer than four months in total'.

Promoted or transferred employees

It is unlikely the setting of a probation period for an existing employee who is promoted or transferred to a new position in the same organisation could be used to ultimately dismiss the employee because of poor performance.

The rationale here is that a decision has already been made that the employee is suitable for employment with the organisation, i.e. the employee's 'permanent' status has already been confirmed. To then place someone's employment under probation may be regarded as unfair, as a tribunal may view the arrangement as an attempt by the employer to bypass unfair dismissal legislation.

Related

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Reasonableness of probation period

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Second probation period permitted in specific circumstances

Existing employees placed on probation by new employer

Probation- meaning of 'determined in advance'

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