Pitfalls with Extending Probationary PeriodsOctober 4, 2018
From time to time employers ask the question, can I extend an employee’s probationary period? There are many reasons for this but a common reason is to give the employee a further opportunity for improvement rather than dismissal for not achieving the desired performance criteria.
Essentially, the answer to this question is that the employer does not have any power to extend a probationary period as this is a matter that is highly regulated by the Fair Work Act 2009 (Cth) (‘FW Act’).
The FW Act provides a statutory ‘minimum employment period’ (more commonly known as a ‘probationary period’) before an employee is entitled to lodge a valid claim of unfair dismissal. The minimum employment period is dependent upon the number of employees employed by the employer. For employers with 15 or more employees it is 6 months and for employers with less than 15 employees it is 12 months.
During this period if an employee’s employment is terminated for performance reasons the employee is excluded from making a valid claim of unfair dismissal. This is leaving aside any other jurisdictional reason the employee may be excluded from the unfair dismissal jurisdiction. However, please note there is no minimum employment period for other claims such as general protections and discrimination. The minimum employment period only applies to unfair dismissal claims.
Given that the minimum employment period is specified in the FW Act, it is therefore not possible for an employer and employee to agree to change or extend this period in a contract or letter of appointment. The Fair Work Commission will only be guided by the minimum employment period in the FW Act. Many employers been placed in a difficult position where they have extended an employee’s probationary period passed the minimum employment period in the FW Act and later dismissed the employee only to find that the employee does have unfair dismissal rights.
The FW Act does however make some concessions to employers as the minimum employment period only recognises periods of ‘service’. This is a defined term in the FW Act which essentially refers to paid employment but excludes periods of unauthorised absences, unpaid leave and unpaid authorised absences. Therefore, by way of example, if an employee has been away from work due to unpaid personal leave, then this unpaid period will not be recognised as service for the purpose of the minimum employment period. In this instance, the employee would have to complete the full period of service (whether 6 months or 12 months, which is applicable) before the employee has unfair dismissal rights.
Some employees, such as state public servants, may have their probation provided for in state legislation and/or policy. If the employee is not covered by the FW Act, you should seek advice from a Livingstones consultant if you have questions in relation to probationary periods outside of the FW Act.
You should always seek advice before dismissing an employee. If you would like to know more about minimum employment periods and unfair dismissal rights, please contact a Livingstones consultant on +61 7 3833 1200.
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