How Do Probationary Periods Work?

Mar 25, 2019
Reading Time: 2 minutes
Written by Lachlan Ward

Sometimes, the interview alone makes it hard to accurately determine how suitable a new employee is for your company. Probationary periods provide you an opportunity to assess your new employees and for them to assess you to see whether they should continue employment at your company. Read on to find out all you need to know about probationary periods.

What are probationary periods?

A probationary period is a period of time where the employer or the employee can terminate the employment contract for any reason. They allow you and your new employee to determine whether they are the right fit for your company. Probationary periods can give you flexibility and avoid the usual consequences for a termination of an employment contract. Since casual employees can be terminated more easily than full-time/part-time employees probationary periods do not apply to them.

How do include one for a new employee?

Probationary periods should be in the employment contract. Your new employee will not be subject to probation if there is no written agreement. You are required to pay your new employees the award rate and annual leave entitlements. Furthermore, you must give employees on probation notice if you terminate their employment.

How long can probationary periods be?

Probation can be as long as you deem necessary to determine whether they are suitable for your business. Most firms choose between three and six months. Importantly, they will acquire protections from unfair dismissal laws under the Fair Work Act if employed for greater than six months.

How long should probationary periods should be?

Ideally, it should be as long as you need to make an assessment on whether they can fulfil the requirements of the role. Be careful against making it too long as this will discourage talented employees from seeking employment at your company. Get in touch with an employment lawyer for further advice about determining the length of your probationary period.

Can I extend a probationary period?

Providing that you included an option for extension in your contract, you are able to extend the probationary period for your new employee. Keep in mind that you should have a good reason to do so, otherwise it will look like you are manipulating the use of probationary periods.

How can I make probationary periods effective?

You should aim to provide the new employee with information regarding how you will evaluate them in the probationary period. Moreover, make sure you give them actual work so you can better gauge their suitability to the role. Another tip is to have regular meetings with them to assist you and them in monitoring their performance. Once the probationary period has ended, it’s good practice to issue the employee with a probation completion letter. This formally documents the period and ending and what the outcome is moving forward.

Conclusion

Therefore, it is important to consider probationary periods when hiring new employees. Keep in mind that employees also have the right to terminate their employment in the probationary period.

Want to know more? Contact a LawPath consultant on 1800 529 728 to learn more about Good Faith and to obtain a fixed-fee quote from Australia’s largest legal marketplace.

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