PROBATIONARY PERIODS v QUALIFYING PERIODS

New employees are normally employed subject to a probationary period. This is usually a period of 3 months from commencement of employment whereby an employer can assess whether an employee is suitable for the position they are employed in. It also allows the employee time to determine if the position is right for them.

Under WorkChoices, the Federal Government introduced a ‘qualifying period’. The qualifying period affects all employment arrangements covered by the Federal Workplace Relations Act 1996 (‘Act’). The length of the qualifying period may be negotiated, but the standard provision in the Act is 6 months.

It may be of surprise to many that probationary periods and qualifying periods are not the same.

What is the difference between a Probationary Period and a Qualifying Period?

Recently in Justin Bartle v GBF Underground Mining Company, the Australian Industrial Relations Commission (‘AIRC’) considered whether there was a difference between probationary periods and qualifying periods. In this case, Mr Bartle, who was employed on a 3 month probationary period, claimed unfair dismissal when his employment was terminated without notice after 3½ months. It was ruled that there was no jurisdiction for the claim since section 643 of the Act states that an employee may not make a claim for unfair dismissal unless the 6 month qualifying period is complete.

In this case the AIRC sought to clarify the intention of the WorkChoices legislation and referred back to the Workplace Relations Amendment (WorkChoices) Act 2005 Explanatory Memorandum to determine whether the terms ‘probationary period’ and ‘qualifying period’ were interchangeable.

The AIRC found that the Explanatory Memorandum supported a construction that probationary periods and qualifying periods serve different purposes. They said that a ‘probationary period’ is based on the performance of the probationary employee and is a period whereby an employer can assess suitability of employment. The ‘qualifying period’ stipulates the length of an employee’s employment before the employee is able to make an application for unfair dismissal. That is, it’s a period of time the employee has to serve before they “qualify” to commence these proceedings.

The AIRC said “because of the different purposes of the two terms, it follows that the length of an employee’s period of probation does not automatically directly affect the default period of the qualifying period of employment”. The AIRC went on to say that the Act is to be interpreted to mean that an employee whose employment is terminated while they are serving a probationary period cannot make an application for unfair dismissal until:

(a) the completion of their qualifying period of employment (i.e. standard of 6 months); or
(b) the expiration of their probationary period,

whichever is the later for the particular employee.

Main implications for Employers

• If you are a constitutional corporation covered by WorkChoices your employees are automatically subject to a qualifying period of 6 months from the commencement of their employment. This period applies as a matter of law. You may make it shorter by an agreement in writing with the employee but this is not recommended.
• Probationary periods apply where they are included in a written contract of employment or workplace agreement. They are usually for a period of 3 months but can be for longer periods where necessary due to the type of position. It is important to note that you cannot extend a probationary period unless it is contemplated in writing at the commencement of employment. If this is not done and you extend the probationary period beyond the initial term, it will not provide you with protection from unfair dismissal proceedings.
• An employee is exempt from commencing unfair dismissal proceedings if their employment is terminated during the probationary period or the qualifying period, whichever is the longer.
• If you have 100 or less employees, your employees are currently exempt from commencing unfair dismissal proceedings in any event.
• If you are not a constitutional corporation, the Queensland Industrial Relations Act 1999 will apply. This legislation does not provide for a qualifying period but does prevent unfair dismissal proceedings being commenced during a probationary period where the probationary period is determined prior to commencement of employment.
• It is important to note that although an employee may be exempt from commencing unfair dismissal proceedings, they are not excluded from making claims for unlawful termination. Unlawful termination is where an employee’s employment is terminated for a prohibited reason. These include, but are not limited to, absence from work due to temporary illness or injury, refusing to negotiate or sign an AWA, discrimination, union membership, being absent on maternity leave or failure to provide adequate notice of termination.

If you have any questions in relation to this Update please contact Aitken Legal.