When on boarding new employees, one common practice is to implement a probationary period. This introductory phase allows both the business and the employee to evaluate their suitability for the role and the company. But is it beneficial, and what are the legal implications? Let’s explore this!
What is a probationary period?
A probationary period is a set time frame at the beginning of employment where the business can assess the new hire’s performance, and the employee can determine if the role and business are a good fit for them. This period typically lasts between three to six months, but the duration can vary depending on the organisation’s policies and the nature of the role.
Legal framework under fair work
Probationary periods are governed by the Fair Work Act 2009. Here are some key points to consider:
National Employment Standards (NES): Even during the probationary period, employees are entitled to basic rights under the NES, including leave entitlements, the right to a safe workplace, and protection from unlawful termination.
Notice of termination: If an employer decides to terminate the employment during the probationary period, they must provide the appropriate notice or payment in lieu, as stipulated by the Fair Work Act. The length of the notice period depends on the duration of employment and the specific terms in the employment contract.
Unfair dismissal: Employees on probation generally cannot make an unfair dismissal claim until they have completed the minimum employment period, which is six months for most businesses or 12 months for small businesses (fewer than 15 employees).
Benefits of implementing a probationary period
- Performance assessment – the business can evaluate the employee’s performance, skills, and cultural fit within the organisation without the long-term commitment.
- Training and development – this period allows the business to provide necessary training and support, ensuring the new hire can meet the job requirements.
- Risk minimisation – If the employee is not suitable for the role, the probationary period provides a structured solution to terminate the employment with less risk of legal repercussions.
- Employee reflection – employees also benefit by having the opportunity to assess whether the job and workplace culture align with their career goals and personal values.
Implementing a probationary period
To effectively implement a probationary period, consider the following steps:
- Clearly outline the terms of the probationary period in the employment contract, including the duration, performance expectations, and evaluation process.
- Conduct regular performance reviews during the probationary period to provide feedback and identify any areas for improvement. Document these meetings to ensure transparency and fairness.
- Offer adequate training and resources to help the new employee succeed. Providing a supportive environment can increase the chances of a successful transition from probation to permanent employment.
- Treat probationary employees fairly and consistently with other employees.
Using a probationary period for new employees can be a valuable tool for assessing suitability and ensuring a good fit for both the business and the employee. By implementing fair and transparent practices, businesses can minimise risks and set the foundation for long-term employment relationships.
If you’d like some advice on how to have successful probationary periods in your business, reach out to your local HR Dept for assistance.
