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Probationary Periods

Do you have more than 20 employees? If your answer is yes, then you are not able to use a 90-day trial period however you may still use a probationary period to assess whether a person would ultimately be suitable for the job. That will normally be in terms of skills, diligence and personality. Probationary periods can be used for new or existing employees and the employee should be given every opportunity to prove that he or she would be suitable.

Employers must meet their obligations of good faith in relying on a probation clause which means if you decide to dismiss an employee while on probation, the dismissal process must be procedurally and substantively fair. This means there must be a good reason for the dismissal and the dismissal must be carried out in a procedurally fair way.

What does this mean in reality?

To begin with, the employee must have a written employment agreement which includes a probation clause. The employee must be made aware of the clause and given reasonable time to seek independent advice before signing and agreeing to the employment agreement. The probationary period can be for any length of time, and this must be clearly stated in the employment agreement.

At the start of the new employment, the employer should tell an employee on a probationary period when they might expect to receive training and feedback. The employer must follow through on any commitments they have made to the employee.

During the probationary period the employer must follow a fair process if there are concerns about the employee. This includes:

  • telling the employee if there are any issues with their work (and if there is a chance that their employment might not be continued after the probationary period ends)
  • telling them what these issues are, and what good performance in this area looks like
  • giving the employee support, and ongoing and appropriate training
  • giving the employee the opportunity to improve. This means that the employer should be giving the employee feedback, support and training throughout the probationary period so that they know there are issues and they have a chance to improve before the end of the probationary period.

We suggest a fair process is a formal process and good practice for the employer with concerns about an employee on probation is to put their concerns to the employee in writing and ask the employee to a meeting so they can respond to the employer’s concerns. The employee should also be informed of their right to have a support person or representative attend the meeting.

If, after the meeting, the employer decides the employee is not meeting its standards, the employee should be informed of this, that their employment is in jeopardy and be put on a performance improvement plan. This way the employer can provide the employee with support, ongoing and appropriate training and the opportunity to improve. Regular meetings are held with the employee to assess their progress against the performance improvement plan.

If it becomes apparent to the employer that the probationary period is not a success, the employee is entitled to receive notice of termination of employment according to the notice period requirements in the employment agreement. Some employment agreements state a lesser notice period for probationary clauses. Employees cannot be summarily (immediately) dismissed.

Employees have the right to raise a personal grievance for unjustified dismissal however if the employer follows a fair process underpinned by the principles of natural justice, the risk is somewhat mitigated.

In some situations, work is going so well that an employer may choose to remove the probationary period and confirm employment early. This can be done if the employee agrees; the agreement should be in writing because it is a change to the employment agreement.


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