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Can I extend an employee’s Probationary Period?

This is a very common question employers ask themselves after having employed a new staff member who may not be suitable for the business. Before we answer this question, it is best that we explain the purpose of a probationary period.

Traditionally, the purpose of a probationary period is to allow the employer and the employee to assess each other and the position, and if the employee is not suited to the position or the business (or vice versa), either party can end the employment within the probationary period for any reason.

During the probationary period, an employer can terminate an employee’s employment for any reason without any unfair dismissal implications arising.

However, under the Fair Work Act 2009 (Cth), an employee cannot make an unfair dismissal claim if your business employs:

  • less than 15 employees – the employee cannot make a claim if they have worked for less than 12 months for the employer; or
  • 15 or more employees – the employee cannot make a claim if they have worked for less than 6 months for the employer.

Given the above, technically all new employees are subject to an automatic 6 month or 12 month ‘probationary period’ (depending on the size of the business), and this would be the case even if your employment agreement stipulated a lesser probationary period (i.e 3 months). In such circumstances, it would be unnecessary for you to extend that period, because the above provisions of the Fair Work Act 2009 (Cth) would ordinarily apply anyway.

Can I extend an employee’s Probationary Period beyond 6 or 12 months?

The question then is: can an employer extend the period beyond what is set under the Fair Work Act 2009 (Cth)? The answer is yes, however, there would be no point in doing so, because even if you extended the period beyond what is set under the Fair Work Act 2009 (Cth), and then you terminated the employee within this extended period, the employee would still be able to make an unfair dismissal case. An employment agreement cannot override the Fair Work Act 2009 (Cth).

Summary

  • The Fair Work Act 2009 (Cth) overrides any employment agreement
  • Businesses that employ less than 15 employees have up to 12 months to assess the suitability of a new employee
  • Businesses that employ 15 or more employees have up to 6 months to assess the suitability of a new employee
  • An employee cannot make an unfair dismissal claim if they are terminated within the above time periods
  • Given the above, there is no need to also have a separate probationary period within an employment agreement

One last thing to remember is that Unlawful Termination (which is different to Unfair Dismissal, and involves an employer terminating an employee for a prohibited reason, such as reasons relating to the employee’s race, sex, religion, pregnancy etc) still applies regardless of how long the employee has been employed.

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