The standard practice these days is to include a trial period in employment agreements.  An employer is allowed to use a trial period of up to 90 days to assess the suitability of an employee, and the employee cannot raise a personal grievance for unjustified dismissal if he or she is terminated within the trial period.

A proposed law change will mean that employers who employ 20 or more employees will not be able to use trial periods in their employment agreements.  These employers will, however, be able to rely on probationary periods, so long as they comply with the following legal requirements:

  • The probationary period must be set out in the employment agreement.
  • The employment agreement must state how long the probationary period lasts.
  • Probationary periods must not restrict the rights of the employee, or the obligations of the employer, and minimum entitlements still apply.

While trial periods can only be for up to 90 days, probationary periods can be longer, provided they only last for a time which is reasonable in all the circumstances.

Trial periods can only be used to assess the suitability of new employees, but probationary periods can be included into the employment agreements of new, and existing, employees.  For instance, an employer can use a probation period to assess whether an employee is suitable for a promotion, or for a different role. An employee can use the probationary period to demonstrate their skills for the role.

During a probationary period, the employer should provide feedback and training for the employee, and if any issues arise, the employer should notify the employee. If applicable, the employer should advise the employee that their employment may not be continued after the probationary period ends.

At the conclusion of the probationary period, the employment continues automatically unless further action is taken by the employer or employee.  On the other hand, if the employer decides that the employee is not suitable for the role, they can dismiss the employee.

The employer must follow proper process, including assessing the employee fairly, indicating why the work is not good enough, and informing the employee that the employer is considering terminating the employment.

The employee must have an opportunity to respond, and the employer must genuinely take into account the employee’s response.  If the employer still decides to terminate the employment, the employer is required to give notice in accordance with the employment agreement.

Unlike trial periods, an employee may raise a personal grievance in response to a dismissal if it was unjustified, or a fair process was not followed.