How does the Fair Work Act provide for probationary
The reason for a probation period is to be in a position to
dismiss without potential recourse under the Fair Work Act
('The Act'), if an employee does not work
out to be suitable. Previously the unfair dismissal provisions of
employment legislation provided for probationary periods for new
employees of up to six months.
Under the Act, there is no longer a reference to a 'period
of probation' with respect to unfair dismissal laws. This has
been replaced by the requirement of an employee to serve a
'minimum period of employment' before there is any recourse
for unfair dismissal under the Act. These periods are:
Six months where the employer employs 15 full-time equivalent
('FTE') employees or more
12 months where the employer employs fewer than 15 FTE
Employers often enquire as to whether a probation period may be
extended, as an alternative to dismissal.
If the employee commences with a three month probation period,
it can be extended for a further three months. If the employee is
subsequently dismissed then they have no recourse for example for
If the employer has more than 15 employees, and the original
probation period is six months, then even where it is extended for
a further three or six months, the employee can have recourse under
the the Act, if they are otherwise able to establish a case. As
such, proper performance management procedure should be adopted in
respect of a dismissal. This generally involves (but is not
necessarily limited to):
Forewarning of a performance management meeting
An offer that a support person may attend
A discussion of the performance issues where the employee's
perspective is taken into account
Advice on what is required to rectify performance
A follow up formal warning letter.
Ideally this needs to occur three times in respect of the same
type of conduct, within a reasonable time period. The employee must
also be provided with proper notice, or paid in lieu of notice.
A probation period is still relevant in the context of
apprenticeships and traineeships. In that case the period of
probation is generally determined by the relevant state or
territory law or government authority. While the apprentice /
trainee is on probation, the employer or apprentice / trainee can
withdraw from the training contract simply by giving the
appropriate period of notice. As soon as the probationary period
has elapsed, the training contract becomes binding on both parties.
It can be cancelled by consent or by application to the relevant
training services authority.
Despite that there is no recourse for unfair dismissal for six
or 12 months, an employee cannot be terminated during their
probation period for an unlawful reason. This includes temporary
absence from work due to illness or injury. In the case of Mr
Brian Prigge v Manheim Fowles Pty Ltd U2009 / 871 (7 January
2010) the applicant's employment commenced at 9.00am on 26
February 2009 and was terminated by notice at the same time on 25
August 2009. A minimum period of employment of six months applied.
The applicant brought an unfair dismissal case and the employer
defended it at first instance on the basis that the minimum period
of employment had not been completed.
Senior Deputy President Richards applied the reasoning adopted
by the Full Bench of the Industrial Relations Commission in
Wilkinson v Skippers Aviation Pty Ltd from 30 April 2001.
The minimum period of employment must be completed 'immediately
before the beginning of the corresponding day of the sixth month
following the date on which the Applicant's employment
commenced' – or immediately before the beginning of
26 August 2009. As such, the applicant's claim was
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Employee incentive schemes will be easier to implement under this new ASIC policy, which started on 30 October 2014.
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