Hi everyone, I’m Peta Cussell from Project Ops and this is week 7 of our 10-week series discussing key areas of Human Resources relevant to Small Business. This week I am going to talk about the ‘Probationary Period’.
'Probationary' employment is the initial period of an employee’s employment designed generally to enable the employer and the employee to determine the suitability of a new employee to the position. This is typically 3-6 months.
If the employee is not suitable for the position or performance is not up to standard, then his/her employment can, in most cases, be terminated by giving the appropriate period of notice as per the National Employment Standards (NES) - one week’s notice or payment in lieu - or the applicable modern award or enterprise agreement if it provides a longer period of notice.
It is important however, to have the necessary documentation in place - Probation clause in the Letter of Offer & Employment Contract, Completion of Probation letter, Performance Review forms & documents - and the process outlined in the company’s Recruitment Policy or in a separate Probation Period Policy (depending on the needs of the business). It is also important to have a clause that covers an extension (an ‘extension term’) of the probation period, which is executed at the employer’s discretion (should you wish).
To ensure a new employee feels engaged, productive and part of the team from day one, creating the right ‘Induction’ experience is key. It is important to integrate them into the organisation's systems, culture and methodologies as soon as possible.
Throughout the probationary period, the manager should provide the employee with regular feedback on their performance. Feedback can be provided informally or during a formal meeting. When providing feedback whether formally or informally, it is important to address any concerns immediately – do not save up any issues for the formal meeting.
Employers may wish to implement a process whereby new employees undertake a formal ‘Performance Review’ both:
- Midway (e.g. 3 months if a 6 month probationary period) and
- Prior to the completion of the probationary period
This provides both the team member and manager the opportunity to assess whether the requirements of the role are being met, and allows time for the employee to improve.
At the successful conclusion of a probationary period, it is appropriate to advise the employee in writing of the conclusion of his/her probationary period.
Unfair Dismissal and Probation
However, with respect to unfair dismissal laws, under the Fair Work Act, there is no longer a reference to a ‘period of probation’. This has been replaced by the requirement of an employee to serve a ‘minimum period of employment’; that is, 6 months (if there are 15 employees or more) or 12 months (if there are fewer than 15 employees).
However, the probationary period and qualifying periods do not prevent other claims for ‘unlawful termination’ (such as discriminatory grounds, breach of contract or trade practices). Accordingly, it is still important to have a valid reason for termination of employment and follow a fair process in carrying out the termination to minimise these risks.
Terminating the Employment during Probation
The employer should hold a meeting with the employee, provide details of the particular performance or conduct issues and provide an opportunity for the employee to explain his or her shortfalls. The employer should consider the employee’s response and decide whether termination is appropriate.
If you are unsure (and you have communicated an ‘extension term’) it is best to execute the extension prior to the probationary period concluding and firming it up in writing. Once the minimum period of employment lapses, the obligations on the employer when terminating a permanent employee (or a casual employee employed on a regular basis) are much more difficult. Therefore, if employers are not satisfied with a probationary employee, they should take action before the minimum period of employment expires.
The Termination Letter
Any termination of employment, must be confirmed in writing. This particular termination letter should state the following:
- Reference to the probationary period that had been agreed to upon taking the role and the length of that period
- The reasoning for termination on the basis of conduct and suitability
- Reference to any warnings given
- Reference to any meetings held
- Remuneration entitlements (e.g. payment in lieu of notice, payment in lieu of accrued and untaken leave entitlements)
- Instructions for returning any company property
- A reminder of continuing confidentiality obligations, as set out in the contract
- And finally a thank you for his/her efforts and well wishes in the future
How Project Ops can help?
Australia’s employment system can be confusing and daunting for small business. Its full of complex policies and changing legalities, is hard to understand and even harder to keep up-to-date with. That’s where Project Ops comes in. We have many years of experience and really understand small business. With Project Ops, we make HR simple!
We can assist with HR Advice; the provision of compliant HR Policies and HR documentation (such as Employment Contracts; HR Letters e.g. warning letters, termination letters etc; Forms; and Checklists); set up your Performance Management system and process; we can guide you through any tricky HR situation; and we can also help you with the Recruitment of staff in the first place! If you would like to discuss how Project Ops can assist your business, please get in touch!
Project Ops are one of Australia’s leading outsourcing specialists, providing some of Australia’s best talent to businesses of all sizes for one-off projects, short or long-term contracts. Specialising in Human Resources (HR), Recruitment, Business Operations, Change Management, Project Management and Event Management.