Probation period clause in an employment contract

Sample clause

a full time employment contract between Lorikeet Dental, a fictional dental practice in Geelong, and a newly hired practice coordinator

6. Probation 6.1 The first 6 months of employment are a Probationary Period. 6.2 Lorikeet Dental will meet the Employee to review performance at the end of the third month, and will give the Employee written feedback within 5 business days of that meeting. 6.3 During the Probationary Period either party may end the employment by giving 1 week of written notice, or any longer notice required by the National Employment Standards or an applicable award, and Lorikeet Dental may pay the Employee instead of requiring the notice to be worked. 6.4 The Employee accrues and may take paid leave during the Probationary Period on the same basis as after it. 6.5 Lorikeet Dental will confirm in writing, within 10 business days after the Probationary Period ends, that the Employee has completed it. 6.6 After the Probationary Period, the notice periods in clause 11 apply.

Sample wording, not legal advice.

Variants

What to negotiate

• Length of the trial

  Employers usually set the length, and three to six months is the common range. Candidates leaving secure jobs sometimes ask for a shorter probation, or for probation to be waived where they are being recruited away from a competitor. Tying the length to how long the role takes to show results is the easiest position to defend.

• A review that actually happens

  A clause that names a review date, a written outcome and a timeframe for feedback gives the employee a fair chance to fix problems and gives the employer a record. Employees value that certainty. Employers sometimes resist fixed dates, but a missed review is the most common reason a probation decision later looks unfair.

• Notice during probation

  The contractual notice during probation is often shorter than after it, but it can never be less than the National Employment Standards or an applicable award. Senior hires sometimes negotiate the same notice throughout, so leaving a stable job carries less risk.

• Whether probation can be extended

  An extension right is useful when leave interrupts the trial. Employees ask for a single extension, a written reason and a cap. Without a cap, a probation can be extended again and again, which damages trust between the parties without changing any statutory protection.

The risk of leaving it out

Without a probation clause nothing statutory changes: the employee still has National Employment Standards entitlements and the same minimum employment period before unfair dismissal protection applies. What is lost is a structured review, an agreed shorter contractual notice for the early months, and a clear record that the fit was assessed at a known point.

Probation is not the minimum employment period

The two are often confused. Probation is whatever the contract says. The minimum employment period is set by the Fair Work Act: an employee generally has to work for 6 months, or 12 months for a small business employer with fewer than 15 employees, before they can claim unfair dismissal, and must also be covered by an award or agreement or earn less than the high income threshold, currently $190,100. A 12 month probation does not delay that protection for an employee of a larger business, and a 3 month probation does not bring it forward. Drafting the clause as if the two were linked is a common and misleading mistake.

What stays the same during probation

The Fair Work Ombudsman is clear that employees on probation keep the same entitlements as everyone else, including National Employment Standards leave, which full time and part time employees accrue and can take. An employee who does not pass probation is still entitled to notice and to be paid unused annual leave. Probation is also no reason to engage someone as a contractor for a trial, because the whole of relationship test looks at the real substance of the arrangement, not the label on the contract. A worker told they are a contractor while doing an employee's job remains an employee for every entitlement that follows.

Where it sits in a generated document

A generated employment contract places probation near the start date and hours, as a short numbered clause whose review date and notice period are written as plain content. The document is numbered throughout, so the probation clause can refer to the later termination clause by number. Where the contract ends in a signature block, each party in it is one signer with a name, an email and a place in the signing order.

Documents that carry this clause

Employment contractA full time ongoing contract for an operations coordinator on $86,000 plus $10,320 of superannuation. Eleven numbered clauses, a leave table drawn from the National Employment Standards, and a notice table that scales with service.Job offer letterAn offer of $98,000 plus $11,760 of superannuation, with the three checks it depends on and a clear instruction not to resign until they clear. The letter also names what is not in the offer, which is the part candidates most often assume.Casual employment agreementA retail assistant is paid $34.00 an hour, which is a base of $27.20 plus a twenty five per cent loading. The agreement shows how every other rate is built from that base, and what the loading is paid instead of.

Questions people ask