If you are looking to hire new staff, you will no doubt be grappling with what specific terms should be included in your employment agreements. This will likely include thinking about the inclusion of a trial or probationary provision. If not, please do consider using one as they are super handy.
Here is a quick question and answer section to help with your decision making.
Presumably, they are different, right?
Correct - trial and probationary provisions are very different beasts. Failing to recognise this can be a costly mistake.
Okay, so how then are they different?
If an employee’s employment is terminated under a valid trial provision, the employee cannot bring a personal grievance claim or legal proceeding in respect of the dismissal. Put another way, the employee is unable to bring a personal grievance claim of unjustified dismissal against the employer.
When deciding whether to terminate an employee’s employment under a trial provision, an employer is not required to adhere to the good faith requirements regarding: (1) providing the employee with access to information, relevant to the continuation of their employment, about the decision, and (2) an opportunity to comment on that information before the decision is made.
This effectively removes the justification and procedural requirements associated with ordinary terminations for cause.
With probationary periods however the ordinary procedural and substantive justification obligations associated with terminations for cause must be adhered to.
I’ve heard that only employers with 19 or fewer employees can use trial provisions. How do i calculate how many employees I have?
This is correct. Small to medium sized employers, which are defined as employers who employ 19 or less employees are the only businesses that can use trial provisions.
When calculating how many employees you have, consider the following.
Timing
The calculation must be made at the beginning of the day on which the employment agreement is ENTERED INTO; that being the day on which the agreement is signed by both parties.
Part-time and full-time employees
Simply count the number of employees you have; part-time employees that, for example, work 20 hours per week are not classified as half an employee for the purposes of the calculation – they are one employee.
Casual employees
The legislation does not make it clear whether casuals should be included in the calculation. That said, if a casual employee is not working at the beginning of the day on which the employment agreement is entered into, we think there is a reasonable argument to say that they should not be included in the calculation.
Keeping track
It may be that, at the time of offering employment headcount is significantly less than 19, but that at the time of acceptance (the agreement being signed by both parties) employee headcount has risen to greater than 19.
Why even use a probationary period?
Probationary periods draw a clear line in the sand; they put an employee on notice that for a specified period their ability to perform the role will be monitored. This means that an employee should be aware that permanent employment is not a given. The net result is that if termination or other disciplinary action occurs because of poor performance, such action is likely to be easier to justify than it otherwise would.
Can I use both?
No, you can only use one.
Final Comment
We have recently created an automated online system that creates an employment agreement suited to your requirements.