Minimum Employment period vs probation
Clarifying the qualifiers – probation and minimum employment period
For many businesses that we talk to, the concept of a probation period is not unfamiliar and often thought to hold protection against dismissing an employee for any or no reason [myth #1]. Probation periods of 3 or 6 months are the typical time periods put into an employment contract to let you and the worker time to see if this is a relationship worth pursuing.
If the relationship isn’t working, either of you can provide notice (as specified in the contract). It is always preferable that the worker is given feedback so that they can adjust their performance or conduct as needed; but you can’t terminate your worker for reasons that could be discriminatory or considered adverse action (eg. your worker being away temporarily due to be sick or injured; or being part of lawful industrial action). This is why termination for any or no reason is one of the many myths.
Can I extend a probation period?
It is possible BUT, not as easy you think [myth #2]. Firstly, do your employment contracts allow for a probation period to be extended? If not, is there mutual agreement to do so? And depending on the length of time already served, there may not be anything to gain.
And this is where the minimum employment period (MEP) fits in…
- Do you have fewer than 15 employees? Yes – then your MEP (under the Fair Work Act) is 12 months
- Do you have 15 or more employees? Yes, then your MEP (under the Fair Work Act) is 6 months.
How Does This Affect Your Business
The law protects employers (based on size of workforce) from claims of Unfair Dismissal during the MEP. A small business is protected up to 12 months while a larger business has 6 months of protection.\
How to Avoid an Unfair Dissmisal Claim
We know probation periods are incredibly useful but if you approach them thinking you have full flexibility to fire for any or no reason, you may stumble. Regular, timely feedback about expectations and outcomes are vital at every stage of employment – get a head start, set the tone and ensure there are no surprises regardless of probation or MEP.