The short answer:
In a legal sense, not really. In a best practice/building a better business sense, yes.
The longer answer:
One of the common misunderstandings we come across in our dealings with small and medium-sized business owners and managers is that, if their recent recruit is not quite working out, they can just “get rid of them” because they are still within their probationary period of employment (typically 3 or 6 months).
While it is true that in the majority of cases employees terminated during their probationary period have fewer opportunities to claim for unfair dismissal, the relevant threshold is their length of service prior to termination, not simply whether they were dismissed during the probationary period.
To clarify;
- Under the Fair Work Act, employees who have been with a business for less than 6 months (or 12 months for small businesses with fewer than 15 employees) prior to termination, are generally not eligible to make an unfair dismissal claim.
- The 6 or 12 month period is called the “qualifying period”, and it’s completely unrelated to any probationary period of employment that may or may not apply. For example, let’s say that an employee successfully completed a 3 month probationary period but was later deemed unsuitable to continue employment. If they were terminated within the applicable qualifying period (either 6 or 12 months), they would still generally not be eligible to make a claim for unfair dismissal, despite having successfully completed their probationary period of employment.
- It’s important to note however that the qualifying period does not apply in the case of General Protections Claims (as distinct from Unfair Dismissal Claims, refer additional information here). As a result, caution should always be exercised and professional support sought when considering terminating an person’s employment, regardless of their period of service.
So Are Probationary Employment Periods Still Worthwhile?
If probationary periods of employment don’t in themselves provide an employer with any direct additional protection from claims by aggrieved former employees, it’s not unreasonable to ask “Should we still bother with them?”
Our view is yes, they remain a useful tool (and we generally include 6 month probationary periods as standard in the employment contracts we draft for our clients), for several reasons:
- Performance Assessment
An application/CV or resume, interviews and referee checks can only tell you so much about a candidate. The probation period allows you to observe how an employee performs in real-world scenarios, including their ability to meet key deliverables and adapt to your business processes. - Cultural Fit
Beyond skills, cultural alignment is essential for team cohesion. Probation periods give you time to evaluate whether the new hire shares your business’s values and contributes positively to the workplace culture. - Risk Management
While probationary periods may not provide direct additional protection from claims by aggrieved former employees, there is a general understanding and acceptance that an employee during a probationary period of employment is in effect “on trial”, so that understanding may play a small part in helping protect your business in the event of a claim (it certainly won’t hurt!). - Employee Development
Probation isn’t just about evaluation—it’s also a time for onboarding and support. Use this period to provide training, set clear expectations, and give constructive feedback. This approach not only helps the employee succeed but also demonstrates your commitment to their growth. - Two-way street
At the same time as you are evaluating your new employee’s suitability, they can and should use the probationary period to determine if the role, workplace culture, and expectations align with their own goals and values. It’s a mutual trial period, not just a test for one side.
So, now that we’ve established the ongoing value of probationary periods, how can you use them to best effect?
Tips for Managing Probationary Periods Effectively
To make the most of probationary employment periods, consider the following best practices:
- Set Clear Expectations
Clearly outline the role’s responsibilities, performance standards, and probationary review process in the employment contract and initial discussions. - Provide and Ask for Regular Feedback
Don’t wait until the end of the probationary employment period to communicate concerns, or seek feedback. Schedule and follow-through on regular check-ins to discuss progress and address any issues early – for both parties. - Document Everything
Keep detailed records of performance reviews, feedback sessions, and any concerns raised during the probationary period. This documentation can be invaluable if you need to make a tough decision. - Be Transparent
If the employee isn’t meeting expectations, be honest and constructive in your feedback. Offer support and guidance to help them improve, but don’t shy away from making the tough call if necessary. In the event you do need to make a tough call, we suggest you seek professional support before doing so, noting that while unfair dismissal claims may not be a potential issue (depending on the employee’s length of service), a General Protections Claim may be.
In a competitive job market, hiring the right people is more important than ever. In our view, probationary periods remain a valuable tool for small and medium-sized businesses to ensure they’re building a strong, capable team while managing risks effectively.
Be sure to reach out if you need additional information or support.
This is general information which we believe to be correct at the time of posting. Information provided must not be considered professional or legal advice. If you’re an employer and need support that takes into account your particular circumstances, please contact us directly.
