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Extension of probationary periods

24/03/2021

There is a common misconception that a probationary period allows an employer to dismiss an employee for any reason prior to the confirmation of their employment. Similarly, there is a misconception that an employer can extend this probationary period where they are not willing to confirm an employee’s employment.

The concept of a probationary period is derived from the minimum employment period contained in section 383 of the Fair Work Act 2009 (Cth) (FW Act), which prescribes the minimum continuous employment period that an employee must complete before they have standing to make an unfair dismissal claim.

The minimum employment period depends on the size of the employer’s business being twelve months for small business employers (employers with less than 15 employees at the time of the dismissal) and six months for all other employers.

These minimum employment periods, which act as a statutory probationary period, apply irrespective of any contractual terms, workplace policies or agreements setting out a probationary period.

In the recent decision of Werner v St Michael’s Association [2020] FWC 2896 an employer extended an employee’s probationary period for an additional three months following six months of continuous employment. The employer then extended the probationary period for an additional two weeks before ultimately dismissing the employee.

The employee then commenced unfair dismissal proceedings in the Fair Work Commission alleging that her dismissal was unfair because she was sufficiently performing the requirements of the role.

The employer argued that the employee had not demonstrated an ability to fulfil the requirements of her position and had failed to pass her probationary period.

Deputy President Barclay found that, as a matter of law, the employee had completed the six-month statutory probationary period imposed by the minimum employment period. Further, that:

“The advice [the employer] had received is that because the Applicant was on probation, her employment could be terminated if she was not meeting the requirements of the role…

It can be seen that the Respondent thought it had an unfettered right to terminate the Applicant’s employment if she had not satisfactorily (in the Respondents eyes) completed probation. As indicated that was wrong.”

The Fair Work Commission ultimately found that the employee had exhibited significant improvement in her performance and was performing her role adequately. As a result, the Fair Work Commission upheld the employee’s claim and found that her dismissal was harsh.

All employees are subject to either a six month or 12-month probationary period due to the operation of the FW Act with respect to unfair dismissal claims. This probationary period cannot be extended or altered by your employer. Further, it does not give an employer the unfettered ability to dismiss employees for any reason, as general protections claims are available to all employees irrespective of whether they have completed a probationary period.