What is a qualifying period?
A qualifying period is provided by the Fair Work Act 2009. In general, an employee is eligible to make an unfair dismissal claim, if they have completed a minimum period of employment, known as the qualifying period, and provided they meet other eligibility requirements. The qualifying period is 6 months for a large business and 12 months for a small business.
The qualifying period exists, irrespective or whether it is included in an employment contract.
If an employee has not completed the qualifying period, then he or she is not eligible to make an unfair dismissal application with the Fair Work Commission. However, it is important to note that employees are eligible to make adverse actions claims without having completed the qualifying period.
What is a probationary period?
Contrary to popular belief, a probationary period does not exist under statute. A probationary period is a contractual term inserted into an employment contract. The aim of the probationary period is for the employer to assess an employee’s suitability for a role. In general, we recommend that a probationary period be 3 months, which provides an employer with an additional 3 months (or 9 months in the case of a small business) to assess the employee’s performance, before the qualifying period is complete.
Tips for managing the probationary period and qualifying periods:
- Ensure you assess an employee’s performance well before the completion of the qualifying period.
- Don’t ignore the warning signs during the qualifying period. Did the employee show up late their first day or work? Fall asleep during training? (These are real examples!). These early signs shouldn’t be ignored if they will influence your decision to terminate employment.
- If you have made the decision to terminate an employee’s employment prior to the completion of the qualifying period, ensure you provide the employee with the requisite notice of termination or payment in lieu and we recommend providing the employee with a termination letter.
Lesson for Employers
Ideally employers should decide whether or not an employee has a future in the workplace prior to the completion of the qualifying period, to avoid an unfair dismissal application.
Further, employers should ensure the reason for the termination is not a prohibited reason or a discriminatory reason, to avoid other claims associated with termination of employment, apart from an unfair dismissal claim.