We’re revealing common HR myths and setting the record straight for employers and business owners. In this series so far we have looked at the Three Strikes and You’re Out Myth, and debunked the myth that Employees can only take Annual Leave after 12 Months.
Another common myth that many people believe is that an employee can be let go, at any time, for any reason, within the first three months of employment without any legal risk to the business.
Although the termination of a person’s employment within probation is unlikely to result in a successful claim, there is still the risk that an employee may claim unfair dismissal. There are also other avenues that a disgruntled employee may take, and so in this HR Myths instalment, we’re highlighting these risks that employers should consider prior to terminating in probation.
What are the risks of firing an employee within the probationary period?
Although and employee can bring forward an unfair dismissal claim if they’re let go within their stated probationary period, this is unlikely to be successful. However, there are other types of claims that can also be made including an adverse action claim, a general protections claim, or a discrimination claim.
To give just a few common examples, if an employee is pregnant, has a disability, has made a previous complaint, has had to take sick leave, is being bullied, or has another reason to believe their dismissal was unlawful, they may take further action and make a claim against the business.
For this reason, it’s important to be clear about the reason for the termination even if it is within probationary period and make sure that the reason is valid, lawful and well supported by documented evidence. For example, if the reason is performance based, then having documented communication with the employee around performance will support that reason, and reduce the risk of the employee claiming the reason for the termination was due to another unrelated reason, such as pregnancy, which could be seen as discriminatory.
How can employers reduce these risks when terminating during probation?
While there is no clause in the Fair Work Act 2009 that requires an employer to state the reason for termination within the probationary period, in some cases it is recommended that a reason is given and documented in their termination paperwork.
It is important if stating a reason for termination in probation that this reason would be considered fair and reasonable.
Why disclose the reason for terminating employment
A business may have a valid reason for terminating a person’s employment during the probationary period, however, in the absence of a specific documented reason being given, an employee may construct their own reasons, and it could expose the business to risk of them making a claim.
This is why it is important that the employer carefully considers the core reason for the termination and communicates this reason to the employee verbally and in writing, to remove any doubt. Documenting is always important to ensure that if the Fair Work Commission were to assess the reason for the termination, that there is evidence to support the decision.
How do I know if I’ve got a valid reason for firing someone?
When considering terminating a person’s employment within the probationary period, it is important to ask yourself what is the real reason you are terminating, and is it the only reason. The reason for terminating must be clear and specific and not one that can be generalised such as “not a good fit”. The reason must be clear enough that there is no opportunity for the employee to misinterpret the reason for the termination of their employment.
To assist businesses in carrying out a fair process consistently across their workforce, we recommend having policies and procedures in place for managers and employees to clearly understand the process that will be followed in the event of a performance issue.
Cornerstone can assist employers in developing processes that meet legal requirements and take into account the practicalities of carrying out these processes correctly within each unique business. If you require assistance managing difficult or potentially risky terminations, don’t hesitate to get in touch with our team, via the chat box here or calling us on 08 6150 0043.
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