Probationary periods and an employees minimum employment period are not the same. Where an employer seeks to extend an employees probationary period, they should first understand what the minimum employment period means.

Extending Probationary Periods?

I was asked a question the other day from a client was considering extending the probation of an employee who was 2 weeks short of completing their 6 months probationary period.  As the question of probation comes up often, I thought it would be an ideal subject to write about.

Employers usually see a “probationary period” as the only proviso they have to comply with when employing a new employee.  However, there is also a legislated requirement known as the minimum employment period.

Minimum Employment Period

I will address the minimum employment period first.  The Fair Work Act 2009 (Act) provides that a person can access an unfair dismissal remedy, if that person has completed a period of employment of at least the ‘minimum employment period’ under the Fair Work Act 2009 (the FW Act).

The Act defines what the “minimum employment period” is for different classes of employers.  Which is 12 months for employees of small business employers, defined as an employer who employs than 15 employees, and 6 months for employees of other employers, who naturally employ more than 15 employees.

It is important to recognise that where an employee has not served the minimum employment period, then they will not have access to an unfair dismissal remedy. However, the employee will still be able to make any other claim they believe exists on termination of employment. These could include, but not be limited to breach of contract, discrimination matters or unlawful termination.

The minimum employment period will have effect, whether the employer and employee are aware of its operation or not.

Probationary Period

An employer may also choose to put a period of time that is referred to as a “probation period” in an employment contract, or letter of offer.  Common probationary periods I see often are 3 or 6 months in length.  These periods, whether the employer knows it or not, run concurrently with the minimum employment period.

 

This probation period does not in any way impact on whether the employee has completed their minimum employment period, as required under the Act. Therefore, the employee may still have access to an unfair dismissal remedy.

 

An employer may wish to include a probation period in an employment contract for such reasons such as regular performance feedback, ascertaining employee's strengths and weaknesses. It also, at times, serves to make the employee aware that they are being scrutinized the duration of the probation period, thereby setting a performance benchmark.

As the probation period is not governed by law, there are no boundaries on how long a probation period can last, however, as stated earlier, it will not affect an employee’s access to unfair dismissal.  An example may assist in understanding, a contract may state that a probation period is for 3 months.  If the employee is dismissed from their employment after the 3 months, but before the employee has served the minimum employment period, required by the Act, the employee will not have access to unfair dismissal.

Conversely, a probation period can be stated as lasting longer that the minimum employment period, however, if the employee is dismissed from their employment, after they have served their minimum employment period, regardless of what the stated period in the contract is, the employee will still have access to an unfair dismissal remedy.

Extending a Probationary Period

Now that we have examined the difference between the minimum employment period and the probation period, we’ll examine whether an employer can extend the probationary period.  There is nothing stopping an employer from extending a probation period, if the contractual arrangements between the two parties allow for an extension, which I don’t see in many employment contracts. 

However, again, as mentioned above, where an employee continues to be engaged after the minimum employment period, 6 month or 12 months, depending on the business size.  They are considered to have completed their minimum employment period and therefore have full access to the unfair dismissal laws, regardless of any extension in the probationary period.

So, the bottom line is, there is no use extending an employee’s probationary period, as regardless of any agreed position, as long as the employee has passed the minimum employment period, they can access an unfair dismissal remedy.

More Information

If you require any more information about this matter or any matters dealing with HR/IR, please contact me via my email at john@lambwrc.com.au, or my mobile 0428 112 009.