What Are Probationary Periods? (And Why They're Important)

By Indeed Editorial Team

Published 30 April 2022

A probation or trial period refers to a set time period during which employers may assess a new employee's suitability for a job role. The probation period is usually between three and six months to allow employers to determine the capabilities and qualities of a new employee. Understanding probationary periods can help you know what they entail and how they may affect you. In this article, we discuss what probationary periods are, detail their importance, review performance management during probation, analyse employee entitlements and answer some frequently asked questions.

What are probationary periods?

Probationary periods are an assigned time frame where employers assess the capabilities of a new employee. The probation allows employers to determine whether the employee has the skills and capacity for the position before making them a permanent staff member. A probation period can make it easier for managers to end the employment of new staff who aren't suitable for the job.

Government legislation ensures the integrity of the probation process and protects employees from unfair dismissal. The duration of the period depends on the business and the industry. Probation or trial periods only apply to new employees.

Related: What Is the Probation Period? Definition and Common Practices

Why is a probationary period important?

Below are several reasons probation periods are important for organisations:

Reliable recruitment

Using probationary periods can help make the recruitment process more reliable. Without a probationary period, the applicant's resume, job application and job interview may be the only references as to their suitability. A probationary period can allow the manager and the business to analyse the employee and determine their practical capabilities. This can be an excellent way to ensure an effective recruitment process for the business.

Efficient resource provision

Probation periods may help more efficient allocation of resources by identifying the areas where an employee needs to improve. These resources can include training materials, skill workshops and mentoring. The probationary period can help identify which resources best serve the employee.

Performance management

During the probationary period, performance reviews can be an effective way of providing information to employees to improve their performance. Performance reviews can highlight their strengths and weaknesses, indicate whether they will be suitable in the role, and identify what help they may require to become suitable. The probationary period can be a tool for both reviewing and improving employee performance.

Related: The Performance Management Process: Your Ultimate Guide

Reduced risk of unfair dismissal

When dismissing employees for performance or suitability issues, there is the potential for them to claim unfair dismissal. A probationary period can end employee contracts legally and fairly by providing the right to dismiss an unsuitable employee. When dismissing employees at the end of their probation period, employers are still required to meet the provisions of contractual agreements and government legislation.

Related: Learn How to Terminate an Employee During a Probation Period

How to conduct performance reviews during probation

Here, you can find more details on reviewing and managing performance during a probationary period:

1. Determine reasonable expectations

By conducting performance reviews on current employees, managers can identify reasonable expectations for newcomers depending on the requirements for the role. For example, a candidate with several years of experience in the industry may be expected to perform better than someone with minimal experience.

2. Inform the employee

Performance management can help management teams meet with the employee regularly and discuss their expectations. An employee is more likely to succeed if they understand the performance expectations. It can be important to approach the probationary period as a method of developing an employee, rather than a method of dismissing them. The role of a manager or HR professional can be to provide them with the information they may require to succeed.

3. Assess performance

It's important for employers to conduct performance reviews fairly and have reasonable expectations. This is because people may learn and develop at different speeds. A new employee who lacks the skills to perform the job responsibilities may still have the potential to reach that level of proficiency.

Related: The 15 Best Performance Review Questions (A Complete Guide)

4. Identify future development plans

By conducting performance reviews during probation periods, management teams can identify an employee's strengths and weaknesses. This can allow them to plan future development programs to improve the employee's skills and knowledge. Employees can be the largest asset for a business, so once their probation is over, the organisation can continue to develop their skills.

5. Improve employee relationship

Performance management during a probation period can help managers foster a healthy relationship with the employee. Actively trying to assist their development may lead them to trust and appreciate the employer. Caring for employee success can motivate them to work hard and develop their skills in the job.

Employee entitlements during probation

It's important for managers and HR professionals to understand employee entitlements during probation periods. By reviewing their entitlements, you can minimise the potential of an unfair dismissal claim or an adverse action claim. Companies in Australia are subject to the provisions of the Fair Work Act 2009 as well as any industrial award that may apply. The Fair Work website outlines the entitlements of employees during a probation period.

Below, you can find the typical entitlements of employees during a probationary period:

  • Employment benefits: Employees on probation receive the same benefits as permanent employees.

  • Fair notice: If you dismiss an employee during probation, they need to be notified in advance and informed of their last shift with the business.

  • Fair dismissal: You can't dismiss employees based on discriminatory reasons, such as age, gender and nationality.

  • Dismissal benefits: If you dismiss an employee during their probation period, they are entitled to any paid leave they might have accrued.

Frequently asked questions

Below you can find frequently asked questions and answers about probation periods:

Can you extend a probation period?

A probationary period may be extended if that is specified in the employee agreement. For example, if the minimum period of employment is four months and the contract allows for a three month extension, then the probationary period may last seven months. A probation period may be extended if more time is required to evaluate or develop the employee's skills.

It is important to identify the minimum period of employment before extending the probation period. This is because it can be an unfair dismissal if an employee is dismissed after their minimum period of employment but before the probation period. For example, if the minimum period of employment is six months and the probation is extended to seven months, the employee can claim unfair dismissal if the contract ends after six months. So, while the probation period can be extended, sometimes it's unnecessary to extend past the minimum period of employment.

Who regulates probation periods?

There is no governing body for probation periods, but companies and employees are still subject to employment legislation and the provisions of contracts and industrial awards. When planning a probation period, both parties need to agree how long the probation lasts and any extension period. A job applicant is free to turn down a job offer if they don't accept the probation terms.

What if an employee resigns while on probation?

There is a possibility that an employee may quit before their probation period is over. Employees on probation have the same entitlements and responsibilities as permanent employees. This means they provide notice of their resignation according to the terms of their contract or industrial award As employees on probation have the same entitlements as other employees, they're eligible for any accrued wages and leave once they resign.

What happens once an employee completes their probation?

Once the probationary period is over, there are three options depending on the progress of the employee. If the employee's performance is satisfactory, the employer may notify them of their success and discuss the next steps in their employment. If the employee doesn't make sufficient progress during the probation period, the employer can decide to end their contract or extend the probation period.

If the employer ends the contract with the employee, this is best done in a meeting where they can provide feedback and reasons for the business decision. This can be an opportunity for a manager or HR person to demonstrate to the employee that the dismissal was fair and in compliance with the Fair Work Act.

Please note that none of the companies mentioned in this article are affiliated with Indeed.