In a previous article discussing 90 day trial periods, we noted that if you have 20 or more employees you cannot include a trial period in an employment agreement. However, you can include a probationary period. A probationary period can be a useful tool in assessing whether an employee is suitable for a particular role.
A probationary period is typically for three months. That time can be extended, but it should only be for however long is reasonably necessary to assess an employee’s suitability for a role. It is not advisable to extend a probationary period further than six months.
An employee on a probationary period receives the same minimum entitlements as all other employees. At the end of the probationary period, the employer may choose to either end the probationary period and continue the employee’s employment, extend the probationary period if they require more time to assess the employee’s suitability, or terminate the employment.
The employer is still required to follow fair process during the probationary period. You should inform the employee if there are any issues with their work, inform the employee that their employment may not continue after the probationary period, provide the employee with support and relevant training to help them succeed in the role, and allow the employee the opportunity to improve by providing constructive feedback.
If, at the end of the probationary period, you determine that the employee is suitable for the role, you should inform the employee that the probationary period is over and that their employment continues automatically as per their employment agreement.
If at the end of the probationary period, however, you determine that the employee is not suitable for the role and you wish to terminate the employment, you must still follow due process. You must give reasons for the termination and give the employee an opportunity to respond to those reasons. If, after considering the employee’s response, you still wish to terminate, you must do so by providing the requisite notice contained in the employment agreement. Unlike a 90-day trial period, the employee will have the ability to raise a personal grievance against you for unjustified dismissal.
For the probationary period to be valid, you need to record it in writing in the employment agreement. You also must pay the employee during the probationary period, provide training and guidance on how to perform the role, and act in accordance with the duty of good faith.
If you cannot use 90-day periods, probationary periods could be a good alternative. If you would like any assistance in drafting a probationary period clause, please get in touch.