Six Month Probationary Period May Be Justified

A recent decision of the Full Bench of the Australian Industrial Relations Commission (Commission) has highlighted the circumstances in which a probationary period of more than three months may be justified.

The Workplace Relations Act 1996 (Cth) provided that employees serving a probationary or qualifying period were excluded from applying for relief in respect of the termination of their employment.

This exclusion applies if the duration or maximum duration of the probationary period is determined in advance and is either less than three months or, if more than three months, is reasonable having regard to the nature and circumstances of the employment.

On 5 May 2003 the appellant, Mr Sankar, commenced employment with the Health Insurance Commission (HIC) as a senior information technology specialist. It was agreed prior to the commencement of employment that there would be a probationary period of six months which was to end on 5 November 2003. Mr Sankar's employment was terminated just prior to the expiry of the probationary period.

The standard probationary period for all employees of the HIC was six months, except Customer Service Officers who performed 12 months probation. This probationary period was to provide for a period for training and to allow an assessment of each employee's aptitude and capacity to do the work required.

Mr Sankar argued that the six month probationary period was not reasonable in his circumstances, particularly having regard to his qualifications, his 25 years of experience in information technology services and his knowledge of public employment.

The Full Bench of the Commission dismissed the appeal by Mr Sankar and upheld the initial decision of Commissioner Deegan that the probationary period was reasonable. The Full Bench found that despite Mr Sankar's prior experience, he still needed to be trained in the HIC work and carefully assessed for his aptitude and capacity to do the work required. The position involved certain complexities which were peculiar to HIC's work and Mr Sankar's ability to adapt his experience and skills to this work was an inherent requirement of his position.

The Full Bench accepted that there was a reasonable need to assess Mr Sankar's aptitude in a number of areas and, for this assessment to be adequate and fair to both parties, a six month probationary period was reasonable. The Full Bench also considered that Mr Sankar had moved from Victoria to Canberra to accept the position and that, in such circumstances, a shorter probationary period could be a disadvantage due to the short amount of time needed for an employee to adjust.

Employers should ensure that they clearly state in the contract of employment that the employee is employed on probation and specify the length of the probationary period prior to employment commencing.

If the probationary period is greater than three months, employers should ensure that they can justify this by reference to factors such as:

• the complex nature of the job

• the level of training required

• the time needed for the employer to accurately assess the employee's aptitude and capacity

• the time needed for the employee to demonstrate their skills

• the experience of the employee and the extent to which this negates these factors.

Employers should also ensure that appropriate criteria are set for the assessment of the employee and that the time required to complete this assessment is consistent with the length of the probationary period. Further, employers should ensure that in assessing the probationary period for each new employee, the specific factors attaching to the job and the individual's characteristics are taken into account.

Clients with any queries regarding the decision and its implications should contact one of the Freehills ER partners.