Misconceptions Surrounding Dismissals in Probation Period
There are a number of common misconceptions surrounding the dismissal of an employee whilst working through their probationary period. Many employers believe that they are protected from any claims that could potentially be bought forward after dismissing an employee and that they do not need to supply a reason for the dismissal. A recent decision of the Federal Circuit Court of Australia (the Court) has demonstrated why employers should be cautious when dismissing employees whilst on their probation period. The case mentioned below is that of Pacheco-Hernandez v Duty Free Store Gold Coast Pty Ltd.
Most often, employment contracts contain a clause which refers to a probationary period of the new employee. Most probation periods range from 3 months to 6 months in length (Owen Hodge Lawyers). As employers, it is important that expectations for the position are clearly defined and communicated; employees should be given work that is an accurate reflection of what their job description requires. This allows for any misunderstandings to be rectified before the end of the probation.
The Australian Payroll Association (2019) writes of Pacheco-Hernandez v Duty Free Store Gold Coast Pty Ltd  FCCA 3734, where an employer was ordered to pay $10,000 in compensation to a former employee whose employment was terminated five months into her probationary period.
During the time of the dismissal, the supervisor was advised by her HR Manager and Area Manager that the employer was not obligated to provide a reason for dismissal of employment. Without any reasoning provided by the employer, the employee then claimed that her employment had been terminated due to complaints she had made about other team members. The Court was unable to confirm that the supervisor’s complaints weren’t substantial or operative factor in the employer’s decision to terminate the supervisor’s employment and found that the employer had contravened the general protections provisions of the Fair Work Act 2009 (Cth) (the FW Act.)
Note that this decision was not in relation to unfair dismissal. The employee made the claim under the Fair Work Act which prohibits employers from engaging in adverse action against an employee (e.g. terminating an employee) for a prohibited reason (e.g. exercising a workplace right to make a complaint) (Australian Payroll Association 2019).
Whilst employees whose employment is terminated in the probationary period are not able to claim for unfair dismissal because they have not yet worked the ‘minimum employment period,’ they are entitled to make other claims as evidenced above. If an employer is unsure about permanently hiring a probationary employee, it is possible to extend the probation period. However, if this is done, and the time runs beyond the 12 month or 6 month statutory Fair Work Act period, the employee then will have the right to file an unfair dismissal claim.
You can find more information about probationary employment by visiting the Fair Work website.
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