Hiring employees is a challenging process as a business owner, even more so if you’re new to the game. Finding the right fit is often a balancing act between identifying the most suitable skills, characters and ambitions. As a result, chances are there will be a time where things just don’t work out. The interview process, as intensive as you may make it, is really only a small glimpse of what an employee is actually like. In reality, it’s difficult to gain a completely accurate insight into the person’s suitability from the hiring process alone. This is where a probationary period is particularly helpful.
What is a Probationary Period?
Probationary periods are a set amount of time in which you as an employer or the employee themselves can end the employment contract for any reason. This provides you with a further opportunity to assess your new employees and how they fit into your particular working environment. A probationary period gives both the employer and the employee flexibility at a point where they are still establishing their suitability to a business. The standard consequences that come with terminating an employment contract are avoided during this period. Be aware that probationary periods do not apply to casual employees as they can have their employment ended a lot easier than someone who is full time or part-time.
How Long are Probationary Periods?
In theory, you can make a probationary period as long as you think is necessary to establish whether an employee is suitable for your business. Generally speaking, the most common length ranges from 3 to 6 months. It is important that you are aware of unfair dismissal laws when deciding on how long you want a probationary period to be. The Fair Work Act provides employees with protections once they have reached the ‘minimum employment period’ at a business. If your business has less than 15 employees, the employee must work for 12 months before being entitled to make a claim for unfair dismissal. This drops to 6 months if you employ over 15 people.
Making a probationary period longer than either of these minimum thresholds, will leave your business open to claims of unfair dismissal when you terminate an employee. A lengthy probationary period can also turn off highly talented individuals from considering employment at your business.
Termination during Probationary Period
If you implement a probationary period and reach the conclusion that an employee isn’t suitable during this time, you can begin the termination process. Despite the fact that a probationary period does make termination easier, there are still some formal steps you will need to take. When ending an employee’s contract whilst on probation, you must still act fairly, provide a valid reason and appropriate notice. The specific amount of notice will depend on the employment agreement or relevant award. The best way to go about this process is to provide the employee with a termination letter. This is where you can outline the reason for terminating and the notice period required along with any additional information such as the employee’s end date.
Resignation during Probationary Period
Just as you can terminate an employee, they are completely entitled to resign during their probationary period. They may realise that the job doesn’t suit them or that they don’t fit the workplace environment. Regardless of their reasoning, employees are also required to provide notice of their desire to resign. Like termination, the amount of notice will depend on the terms of the employment agreement. Again, this does not apply to casual employees, only full time or part-time.
To get the most out of a probationary period as an employer, it is best to be transparent with an employee about your expectations. Maintaining consistent communication will help you monitor performance and also assist your employee in understanding their role. If you feel like termination is necessary but are unsure about the process, the advice of an employment lawyer may be of use.
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