How to get the best out of probationary periods

Updated: 13 February 2024.

For most businesses, 90-day trial periods are the perfect tool for making sure a new employee is right for the job, especially since the law change in December 2023 that allows all employers, regardless of size, to use 90-day trials.

However, there are times when you won't be able to use a 90-day trial - e.g. the person has worked for you before or is a current employee moving into a new role - so you may want to utilise a probationary period instead.

In our experience, probationary periods can be just as effective as 90-day trials for assessing new team members. They just have to be done with the right attention to good faith and proper process, because they don't offer the same protection from unjustified dismissal claims.

In this post, we look at how probationary periods work, and provide helpful guidance on how your business can set up and run quality probationary periods.

What are probationary periods?

A probationary (or probation) period allows a business to assess a new employee's suitability for a role within a specified timeframe, based on their capability, performance, conduct etc.

Remember, employees include all casual, permanent, and fixed-term staff. Independent contractors are not employees.

The performance criteria, procedure, and length of the probationary period are defined by the employer (so long as they are fair and reasonable) and agreed to by the employee as part of their employment agreement.

The probationary period clause in the agreement must also set out a fair process for managing performance issues and ending employment if those issues aren’t resolved. Think of it as if you were employing somebody on a final written warning.

Note: You can't put an employee on a probationary period after they complete a 90-day trial period. If you haven’t given the employee notice by the end of the trial period, then they are no longer on trial and their employment continues.

Benefits

• It can be as long or as short as you want it to be, by agreement with the employee.
• You can extend it if you’re not happy with progress.
• As the employer, you have greater control over the process followed, provided it is fair and reasonable.

Drawbacks

• There is no protection from a personal grievance for unjustified dismissal, like with 90-day trial periods, so you may be challenged.
• You are required to undertake more consultation, so the process is more detailed.

How to run an effective probationary period

1. Ensure your recruitment process is robust so you give yourself the best chance of getting the right person for the role and the organisation.
2. Have a robust clause in the employment agreement. This is where the employee agrees to take the job subject to a probationary period – it can be useful to remind them of this if problems arise.
3. Give your new employee a complete induction and onboarding. Provide support and training, catch up regularly, give detailed feedback, and document the process. Don't let things lie; address any issues (even minor ones) early so new people know where they stand. Give them clear direction and the opportunity to improve.

What if things don’t work out?

During a probationary period, you must fairly assess the employee and give them clear feedback and the opportunity to improve on any areas of concern. Be explicit and advise them if you have any concerns that are likely to trigger termination.

If you decide to dismiss the person, the process for termination is much the same as a formal disciplinary procedure: you must tell them that you intend to end their tenure, clearly explaining why and presenting documented reasoning.

You have to give the employee an opportunity to respond and you must consider their feedback before making a final decision. You can then give them notice to end their employment (the length and terms of the notice must be those stated in the employment agreement).

Unlike 90-day trial periods, employees can raise a personal grievance on the grounds of unjustified dismissal, so ensure the process is watertight.

Our advice

Good quality, fair employment practice is always the best solution. Employing staff should be a positive experience for all parties, so don't leave things to chance.

Treat the probation periods with the same rigour and respect as you would your other legal obligations.

If you need any help setting up or running effective probationary or trial periods, reach out to MyHR.

Frequently asked questions

I want to fire someone who has been with me for a week. Can I use a trial period?

Not unless you and the employee have agreed to a trial or probationary period before they start work and it is stated in their employment agreement.

There are several hoops to jump through when using a trial period. If you’re considering doing so, seek specialist advice to ensure you have a valid trial period in place.

Get more answers to questions about the disciplinary process and probation periods.