Be warned – You may still be at risk of a claim even if you dismiss an employee within their probationary period

When an employee is within their 6-month probation period, an employer can terminate the employment without risking a claim, right?

As is often the answer from lawyers “It depends”! In this article, we explain why you could still be at risk of an unfair dismissal claim or a “general protections” claim, which could be more serious.

Having a probation period in the contract is only one factor

There is a lot of confusion about probationary periods in employment contracts and the right to terminate an employee’s employment if the employee is still within the “probationary period”.

First, a contractual probationary period might give certain contractual rights to end the employment. For example, to end the employment with a shortened notice period. But probationary periods do not confer a wholesale “right to terminate employment”. In addition to any contractual right, there is the statutory overlay from the Fair Work Act 2009 (FWA) that provides for protections from termination of employment.

One statutory overlay is that an employee must complete a “qualifying period” before the employee has the right to bring an unfair dismissal claim. The qualifying period and the probationary period are not necessarily the same thing, but the 2 can operate concurrently. Certainly, it is usually best, particularly to minimise confusion, to have a probationary period which mirrors the qualifying period.

So, what is the qualifying period? It is a period of continuous service. For employers with 15 employees or more, it is 6 months of service. For employers with fewer than 15 employees (14 or fewer) as at the date of the dismissal, it is 12 months.

Unfair dismissal is a dismissal that is harsh, unjust, or unreasonable. The factors that are taken into consideration about whether a dismissal is harsh, unjust, or unreasonable are (although not limited to):

• is there a valid reason to dismiss (poor work performance or misconduct);
• was the employee told of the reason;
• if the reason was poor performance, did the employee have an opportunity to remedy their poor performance;
• if the reason was misconduct, did the employee have an opportunity to respond to the allegation of misconduct;
• was the employee permitted to have a support person at any meeting about their dismissal; and
• any other matter the Commission considers relevant.

Employers must remember however that the qualifying period (6 months or 12 months) only applies to unfair dismissal.

A general protections claim for dismissal is a separate risk for employers

There is another form of claim which can arise out of a dismissal other than an unfair dismissal claim. The FWA provides that an employer must not take adverse action against an employee because that employee has a workplace right and exercises or proposes to exercise that right. Also, an employer cannot take adverse action in order to prevent the exercise of a workplace right.

Adverse action includes dismissal. A classic example of a workplace right and dismissal is the right to take sick leave if an employee is sick. If the real reason an employer dismissed an employee is because the employee took sick leave, then that is adverse action (dismissing the employee) because the employee exercised a workplace right. That would be a breach of the general protection obligations, entitling the dismissed employee bring a claim against the employer.

An employee can bring a general protections claim for a dismissal during the qualifying period

For a general protections dismissal, such as a dismissal because the employee took sick leave, it does not matter whether the employee has been employed for one day or 3 months or 12 months. The employee is entitled to bring a general protections dismissal claim irrespective of how long they have worked for the employer.

In our experience, some employees who are excluded from bringing an unfair dismissal claim (because they haven’t completed the six-month qualifying period) try to claim that the dismissal was because of the exercise of some workplace right – because that’s the only way they can bring a dismissal claim.

Some employees have claimed that if the dismissal was truly because of performance reasons or misconduct reasons, then surely the employer would have raised those reasons with the employee. So, the fact that an employer does not raise those reasons, says to the employee, that performance or misconduct is not the real reason for the dismissal – the real reason was a general protections reason.

For this reason, even if an employee has not completed the qualifying period and cannot bring an unfair dismissal claim, it is risk minimising to talk to the employee and to explain about their poor performance or their claimed misconduct, and to give them an opportunity to respond. That way, it is more clear that the decision to dismiss had nothing to do with general protections or the exercise of a workplace right. It helps put the dismissal squarely in the unfair dismissal category and to limit the risk of a “manufactured” general protections claim.

What you need to do:

1. Forget the myth that your business is not at risk from a dismissal claim because an employee is dismissed whilst still within a “probationary period”.
2. Make sure any probationary period in an employment contract mirrors the qualifying period under the FWA.
3. If you decide to end an employee’s employment before they complete the qualifying period because you have decided that they are not suitable for your business:
   (a) talk to the employee and explain that their performance is not up to scratch or identify the misconduct; and
   (b) tell the employee that leads you to believe that they are not suitable to remain in their employment;
   and even though you are not obliged to do this in order to defend an unfair dismissal claim, it can become evidence that the reason for the dismissal was unrelated to any general protections/workplace right reason.
4. If in doubt, consult us – It may save you money in the long run.

Nothing can prevent an employee from filing an unfair dismissal or general protections claim. But, if you have taken careful steps prior to the dismissal, you can minimise the risks that such a claim can be costly and time-consuming for the business. You will be in a strong position to have any such claim dismissed quickly.

Queries

For further information regarding the above, please contact the author or any member of our Employment, Workplace Relations & Safety team.

Disclaimer

This information and the contents of this publication, current as at the date of publication, is general in nature to offer assistance to Cornwalls’ clients, prospective clients and stakeholders, and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.