Are you allowed to terminate an employee during their probation period?
Let’s say that you’ve hired a new employee and have been assessing them over the previous months. Known as a probationary period, this can assist you in determining the employee’s suitability for the role.
If the employee isn’t suited to the role, there are fewer obstacles to terminating the employee during this probationary period.
It can also help to prevent unlawful dismissal claims. Under the Fair Work Act 2009 (the Act), there is no such thing as a probationary period. Instead, there must be a minimum employment period. The amount of time the employee has worked in the business and the size determines the probation period. For a small business (less than 15 employees), this is 12 months. Otherwise, it is six months.
During the minimum engagement period, an employer may terminate an employee subject to written notice by the relevant provisions of the NES, the applicable industrial instrument or their employment contract.
Probation Period Best Practice
For best practice in terminating employees, employers should:
- Have a policy in place in respect of managing and possibly terminating employees during their probationary period
- Have a drafted employment contract before the employee commencing work that clearly states the length of the probationary period. The contract should include the start and end dates and specify the circumstances of the probation extension.
- Make employees aware of the expectations they may need to fulfil in terms of skills, tasks, deadlines and conduct.
Before the probationary period ends, employers should let employees know whether or not they have passed their probation. If they are unsuccessful, you can either extend their probationary period or terminate their employment with your business.
Termination
If you choose to terminate the employee, you will need to provide them with written notice to end their employment, with the period of notice given (or payment in lieu of notice) and the date the employment will end.
Valid reasons for terminating employment can be varied. Still, to minimise the risk of a subsequent unfair dismissal claim, these are the four key areas under which you may be able to terminate employment:
- Capacity – if the employee lacks the ability or is incapable of completing the inherent requirements of their role.
- Performance – if the employee’s skill level or quality of work is below the required level for the job. Additionally, if the employee is not meeting the standards outlined in their employment contract due to a lack of care or diligence.
- Misconduct – inappropriate behaviour that is out of line with company policy, goes against the terms of an employment agreement or is unlawful.
- Redundancy –An employer decided not to continue filling an employee’s role by anyone. It also applies when the employer becomes insolvent or bankrupt.
If you are concerned about unlawful dismissal complaints from terminated employees, you should consult with Fair Work to ensure that all of your bases are covered.
