Probation periods and minimum employment periods

Public news

A probation period is a period at the start of employment where an employer can review the suitability of their new employee. The purpose of the probation period is to determine whether or not the employee is a good fit for the business in regards to their skills, productivity, temperament etc. It can also be an opportunity for the employee to decide if they wish to continue their employment with that employer.

Most probation periods are set for 3 to 6 months; however they could be set for more or less depending on the nature of the role as well as the reasonableness of it. The probation period should always be established in writing and it is best to include it in an employment contract which should be given to a new employee and agreed to before they start.

Sometimes, in order to assess the suitability of a new employee, an employer may initially appoint them on a casual basis for a period of 3 to 6 months and then if they believe they are suitable, consider transferring them to a permanent status. This can be useful where an employer is not sure about the working times of a new employee.

Where an employer chooses to hire an employee initially on a casual basis they should be aware that should the employee be doing full-time and/or consistent hours in six months or twelve months’ time they will have to offer permanent work (depending on the award). In addition if it is always the employer’s intention to have the employee doing full-time work then it may be best to hire them as a permanent employee as the employee may not wish to change from a casual.

If an employee is engaged as a permanent employee i.e. Full-time or Part-time, they will begin accruing leave entitlements from commencement. Just because an employee is in their probationary period, this does not mean they will not accrue any relevant leave entitlements during this period. If the employee is engaged as a casual, they will not accrue leave entitlements; however they will be paid a higher rate, with a 25% casual loading being applicable. It is also important to have the proper documentation in place to confirm the employment status of the employee at commencement.

It is important that an employer does not confuse the probation period with the minimum period of employment an employee must serve before they are entitled to bring an unfair dismissal claim. In many cases however the probation period is aligned with the minimum employment period.

The minimum period of employment that an employee must serve before being entitled to make an unfair dismissal claim is 12 months if the business has less than 15 employees and 6 months if the business has 15 or more employees

An employer can dismiss an employee in a probation period regardless of whether they have been employed on a full-time, part-time or casual basis. Members should also ensure that they follow a reasonable process prior to terminating an employee’s employment during the probation period.

Where an employee is ineligible to make an unfair dismissal application, members need to be aware that they can still make a ‘general protections’ application. This is where an employer has decided not to hire an employee for a discriminatory reason e.g. race, sex, age, etc , or has dismissed an employee for raising a workplace rights query, or being a member of a union, etc. This discriminatory reason also does not need to be the sole factor in a decision and can be just one of them.

For more information on probationary or minimum employment periods please contact the MTA’s Workplace Relations team on 8291 2000 or via email by clicking here.