So, you have an underperformer and they're still on probation. You can just sack them right? Confusion abounds when it comes to probationary periods ... the thing we think about as being 'probation' - the period where no one can come back at you for unfair dismissal - actually isn't even called that in legal land. Rather, that timeframe is called the minimum employment period. And even if you sack someone within that period you can still get yourself into hot water. Let me explain.
Probation has a contractual rather than a particularly practical purpose in the Australian context. It allows for termination of the employment contract under certain conditions, but it doesn’t actually replace your statutory obligations under the Fair Work Act. The Act provides for a ‘minimum employment period’ of 6 months for employers with 15 or more staff, and 12 months for those with fewer than 15 staff. During that time the employee is not covered by unfair dismissal laws. And you're right, you can terminate an employee for any *lawful* reason during that time.
The minimum employment period applies whether the employee is still on their ‘probation’ or not. If you have a 3-month probation period in your employment contracts and, say, you’re a small business with under 15 people, you can still terminate employment without unfair dismissal applying for another 9 months. If you’re a larger business (15 or more employees) and your probation period goes for longer than 6 months, the employee is covered by the unfair dismissal laws after 6 months regardless of whether they are still on ‘probation’ in a contractual sense.
All seems reasonably straight forward right? They’re underperforming and they’re still in the ‘minimum employment period’ … There’s no risk in sacking them right??
While unfair dismissal laws don’t apply during this period, general protections dismissal laws do. What does this mean? It means you can’t terminate an employee for any unlawful reason. That means for any of the following:
Mental or physical disability
Marital status, family or carers responsibilities
National extraction, or social origin
OR because they were temporarily absent from work because they were sick or injured
OR because they joined or did not join a trade union or participated in industrial activities
OR because they exercised or proposed to exercise a workplace right (eg by making a complaint or inquiry in relation to your employment, such as querying a pay rate)
This might still seem straightforward, you're a good employer,, right? You'd never dream of terminating someone because of any of those reasons. However, in my experience while there can be recourse to any of them in complex relationship breakdowns, it is the illness and the exercising a workplace right factors that often bring employers unstuck.
This is because while in the vast majority of cases there are very valid reasons why people need to take leave or raise an issue during their probation, unwarranted leave and/or vexatious complaints are often part and parcel of the behaviours demonstrated by employees who also aren’t performing in those first few months in the role. Without adequate evidence to demonstrate that those factors are not the reason for termination, employers can get themselves into complex situations where the employee can show that they have been absent or made a complaint/s and the employer has no means of showing the allegation/s were not a factor in the decision.
So, what can you do? First of all never, during the termination conversation, make reference to those factors as being part of your decision making even if the person has been a complete disaster. The FairWork Ombudsman provides excellent templates for probation, including a letter for unsuccessful probation which provides all the information you need to provide to the employee i.e. generally, the less the better. You can find their resources here: https://www.fairwork.gov.au/employee-entitlements/types-of-employees/probation While there is generally no need to provide an explanation for your reasons for termination during probation, it is important that you have evidence for the reasons you do have should the employee make a general protections claim or if you do want to explain the reason to them. This could be feedback from other managers or staff relating to performance, numerical reports showing fewer transactions or actions than expected and so on. Make sure too, that there aren't mitigating factors related to any potential allegation and/or that you have a response that supports the objectivity of your decision.
It's important to know that the information here doesn't substitute for legal advice and you should certainly seek legal advice if you have any concerns about a termination process. If you're a small business and can't afford legal fees, I would strongly recommend joining your industry body or your state's chamber of commerce as they can often provide industrial relations advice and support, or, that you contact the FairWork Ombudsman for free advice.