How long should a probation period be?

Employers need to think carefully about extending an employee’s probation period, ensuring that they have strong reasons to do so.

It is a common misconception that employers can continually extend an employee’s probation period to assess them with a view to dismissal.

“The purpose of the probation provision should be clearly understood,” Robin Young, partner, Holman Webb Lawyers workplace relations group, said. 

“It is not a qualifying period for access to unfair dismissal laws, which is dealt with under the Fair Work Act, which is six months generally, or 12 months for small businesses. Although it is common for the probation period to mirror the qualifying period.”

Recent cases have shown employees are prepared to take their case to the Fair Work Commission if they think they have been unfairly treated through extensions of probations periods.

Young points that the probation clauses need to include some essential express terms such as:

• The term of the probation
• The purpose of the period which is effectively to afford both the employee and the employer an opportunity to get to know each other and decide if the arrangement is suitable
• The expectations including appropriate check-ins or review points; and
• The notice which must be provided to bring the employment to an end during the probation period. 

“The clause usually states that before the end of the period the employer will inform the employee if it wishes to continue the employment,” Young said. “As such, in practice it is more a tool for the employer to decide whether it wishes to proceed.  Given that the national employment standard affords a minimum notice period of one week during the first year, that is the minimum required notice during probation.”

Generally, employers should have guidelines in place, as well as a mentor or regular feedback mechanisms, so an employee can gauge how they are going. This will also give an indication of whether an employer thinks that they have the right person or if there is something that can added such as training to help the employee along.

“The most common probation range is three to six months,” Young said.  

“Often it is said that an employer cannot really get to know an employee within this range, however, realistically an employer conducting proper oversight and management of the employee should be able to form a view within that time, absent of a specific event or incident involving the employee’s conduct or performance, which may put the issue in doubt.”

Extending probation periods

Companies can extend a probation period if it is stipulated in the contract. Employers should also communicate with the employee beforehand if they are contemplating going down this path.

“It is prudent for the employment contract to expressly provide for the employer’s right to extend the probation period,” Young said.  “Absent such a contractual right, an employer may secure agreement to extend the period, failing which it would decide to terminate.

“This gives the employee an additional period of opportunity to satisfy the employer, so it is prudent for the employee to agree or otherwise face dismissal, however, it is important to be clear that this will not have the effect of extending the qualifying period for access to unfair dismissal rights.”

Employers should make the decision with due care and respect, as it can cause tensions within the business.

“Generally, it is prudent to make a decision within the relevant period,” Young said. “If the employer is not certain that it wishes to employ the individual by this time, it probably means that they are not a good match.

“An exception to this may be where the employer, for whatever reason, has insufficient time or opportunity to review and consider the merits and performance of the employee. 

“If the employer does wish to extend the period it should be clear on its right to do so, or to secure agreement, and be very clear in writing on the terms of the extension; what notice is required to terminate going forward; and when it will end, either by way of confirmation or termination.”