Hiring a new person is a huge risk for any business, and with people being people, there are no guarantees that you are going to get it right. How the person performs in the job is the true test of a new employee.
The FWC allows Employers to place new employees on a probation period to assess if they are suitable for the role and business. The employer decides on the length of the probation period. It can range from a few weeks to a few months at the start of employment.
While on probation, employees continue to receive the same entitlements as someone who isn’t in a probation period. If hired on a full-time or part-time basis, an employee on probation is entitled to accrue and access their paid leave entitlements such as annual leave and sick leave. If an employee doesn’t pass their probation, they are still entitled to receive notice when employment ends and have their unused accumulated annual leave hours paid out.
So how long should a probation period be?
Under Unfair Dismissal legislation, the minimum amount of time an employee needs to be employed before they can make a claim for unfair dismissal is 6 months (or twelve months for small business employers, with fewer than fifteen staff), so effectively, employers can terminate within this period anyway. With this in mind it is fair to have a 6 month probation period, so there is no ambiguity for the employee.
How can an employer make the most of the probation period?
It is really important for the employer to use the probation period to assess your new employee. From day one, there should be an induction plan, performance development plan and performance goals set for the duration of the probation period, to ensure that the new employee can be assessed against quantifiable criteria. Make sure that you schedule regular probation-review meetings and use the opportunity to provide constructive feedback, identify development needs and use the time to get the employee up to speed. If you are engaging in this process, you will soon clearly see if the employment is going to work out or not, and an informed, fair decision can be made in a timely manner.
Ideally, the 6-month probation period should be structured to proactively manage the induction, assessment, development and progress of a new employee, within the 6 month period, so that you can be absolutely sure as the end of the probation period approaches, whether or not you wish to continue the employment or terminate.
The first four weeks of employment should be a comprehensive induction period, where the employee learns about the company, values and expectations, the broader workings of their department and their specific role, as well as gaining a broad understanding of other departments and general company activities. Ensuring that the induction is thorough, and the employee fully understands what their role entails, sets the cornerstone for performance assessment.
By the end of the induction period, (around week 4) performance output expectations should be well established and it is time for a formal Probation review meeting. At this meeting, the employee is given feedback, areas requiring further training (if any) are identified, and training arranged to meet these needs. If the employee is tracking well with day to day tasks, set some short-term goals – four to six weeks is ideal.
The goal achievement date sets the time for the next probation review meeting. By this stage, you are going to have a pretty good idea of whether the employee is going to be able to perform the role that you require.
If the employee is tracking well and performing the job as expected, a final Probation Meeting should be held at the six-month mark, to provide feedback to the employee, and advise them that their probation has been successful.
If you believe that the employee is not meeting performance requirements, it is time to start a Disciplinary/Performance Management Process. You would then performance manage this person, following your established procedures as you would any other employee. Ensure procedural fairness, be specific about your concerns and clear about what they need to do to improve. Be sure any criticism is constructive and that you provide opportunities for the employee to respond to your concerns, and reasonable opportunity for them to improve and development the skills required to perform the role.
This process may take several weeks, and it may come to the point where you need to terminate employment within probation.
It is worth noting though, that even though an employee on probation cannot make a claim for unfair dismissal, they can make a General Protections Claim, so it is essential that you act within the law throughout the process.
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