Terminating an Employee During Their Probation Period – Are You Protected?

A probation period is considered a trial for the employer to assess the employee’s compatibility, skill-set and reliability for the job. In this market, employee’s equally use probation periods to determine whether their personal values align with the culture and ethos of the employer’s enterprise.

Generally, employment contracts for part-time and full-time employees will require that an employee successfully completes a probation period that ranges between three to six months.

Casual employees on the other hand, are not subject to probation periods on the basis that their characterisation of employment requires no firm advance commitment to ongoing work by the employer.

 

Risk Exposure

The Fair Work Act 2009 (Cth) (Act) requires part-time and full-time employees to satisfy a minimum employment period in order to access the unfair dismissal regime. Section 383 of the Act states that the minimum employment period is twelve months for small business employers with less than 15 employees at the time of dismissal, otherwise the minimum employment period is six months.

It is best practice for employers to align their probation periods with the minimum employment period that applies to the size of their business to maximise protection from unfair dismissal claims. However, this is not a bullet proof method, as highlighted in recent court decisions, such as Pacheco-Hernandez v Duty Free Stores Gold Coast Pty Ltd [2018] FCCA 3734 (“Pacheco-Hernandez”).

 

Current Landscape

In Pachecho-Hernandez, Commissioner Matthews noted that “it is still possible for a dismissal to be unfair, where it occurs during a probationary period”.

The General Protections (“GP”) regime prohibits employers and principals from taking adverse action against an employee or contractor because they have exercised a workplace right or engaged in industrial activity. Minimum employment periods do not apply to GP claims.

In circumstances where an employer terminates an employee during their probation period for exercising a workplace right, including (but not limited to):

• formalising a workplace grievance;
• filing a valid workplace complaint; and
• exercising their rights in accordance with an industrial instrument such as exhausting leave entitlements and requesting flexible work arrangements, an employee is entitled to make a GP claim regardless of their employment tenure.

Employers must be mindful of the current anti-discrimination framework which applies during probation periods and hinders employers from prejudicing an employee during the probation period for discriminatory reasons relating to carer responsibilities for primary care-takers or characteristics inherent to an employee’s nationality, gender, sexual orientation religion, or disability.

 

Deep Dive: Pachecho-Hernandez

In this case, a HR manager dismissed an employee who was employed for five months without providing a reason, stating that the employer was under no legal obligation to give one.

Despite the absence of a reason from the employer, the employee claimed that she was dismissed as a result of formalising a complaint regarding:

1. the employer contacting her outside of her contracted hours;
2. the negative attitude of her colleagues; and
3. mis-management of internal operations, citing feeling of “overwhelm” due to insufficient training.

The employer claimed that the dismissal resulted from a joint decision with the Area Manager that the employee ‘did not fit within the team’. However, the employer was unable to produce evidence to this effect.

Judge Manousaridis stated that “it is difficult not to conclude that the complaints constituted or at least formed a substantial part” to her dismissal. It was therefore determined that the employee was dismissed for exercising a workplace right. The employer was ordered to pay the employee over $10,000 for lost wages, leave entitlements, superannuation, and interest.

 

Key Takeaways

Often employers assume that they have an automatic right to terminate during the probation period without properly considering any facts or unresolved grievances that may entitle an employee to file a GP application in the Fair Work Commission.

It is prudent that employers undertake due diligence and holistically assess the facts leading up to a termination during probation to ensure that the employee cannot justify that the dismissal was a result of a ‘prohibited reason’.

Contact the Workplace Law Team at Chamberlains Law Firm for an obligation free consultation on navigating lawful termination in the workplace.