A probationary period is a period of time when an employee is first employed, during which either party may terminate the employment relationship for any reason. The purpose of a probationary period is for both parties to decide whether the employee is suited to the position and/or the company.
Under previous legislation an employee who had “passed” their probationary period was automatically protected from unfair dismissal.. Under current legislation that it is no longer the case, making the probationary period a source of much confusion in the context of unfair dismissal legislation.
The Fair Work Act now refers to the relevant ‘minimum employment period’ for the purposes of determining whether an employee is eligible to make an unfair dismissal claim. The ‘minimum employment period’ is either:
6 months – for an employer that employs morethan 15 employees
12 months – for an employer that employs less than 15 employees
This means that an employee is exempt from making an unfair dismissal claim if their employment is terminated during the minimum employment period, regardless of whether they have completed a probationary period or not.
For example, an employee who has passed a pre determined 3 month probationary period, but not yet completed six months minimum employment with his or her employer, is not able to claim unfair dismissal. It does not matter that they have passed their probation – because they have not yet met the ‘minimum employment period’.
So what is the point of a probationary period? These days they are considered appropriate as part of an employee’s induction into the workplace and best practice human resource management. However, there is no practical effect of a probationary period with respect to the unfair dismissal laws under the Fair Work Act.