We have employment agreements that contain a probationary period clause of three months. One of our employees is coming up to the end of this period and we would like to extend this for a further three months. Is this lawful?
Employers should be encouraged to talk with employees about poor performance even during probationary periods.
Unfair dismissal is not the only option for the employee; a claim under the “adverse action” or anti-discrimination provisions of the Fair Work Act can be made whenever the employment is terminated, and it is important for employers to have evidence of the real reasons for dismissal.
In relation to the probation period itself; the Fair Work Act specifies that an employee must have completed the minimum period of employment before an unfair dismissal claim can be made.
The minimum period of employment operates as a probation or qualifying period fixed by statute. For most employees the minimum period is six months.
If the employer has less than 15 employees and is a “small business employer”, the minimum period is 12 months.
So, even though the contract states that the probation period is three months, the employee would be excluded from making a claim of unfair dismissal until they had completed six months of service (but this is assuming you have more than 15 employees).
It’s okay to extend a probation period within these limitations. If you intend to terminate the employment at the end of an extended period of probation, make sure you have calculated the time period correctly, as being over the statutory minimum period will enable the employee to make a claim.
If the employee has commenced as a casual employee, their service may count as part of the minimum period. As always, you should seek advice before acting.
Written in conjunction with Peter Vitale, an experienced employment and industrial relations lawyer www.petervitale.com.au