Counting down the days: Employee absence during a probation period

How does an employee’s absence during their probation period affect their ability to bring an unfair dismissal claim? Does it extend their probation period or Minimum Period of Employment?

It’s now standard practice to include a probation period in a employee’s contract of employment. This allows a business time to assess the employee’s suitability for the role and whether they fit with the business. But employers need to be careful they don’t confuse an employee’s probation period with the Minimum Employment Period.

The Minimum Employment Period is a term used under the Fair Work Act 2009 to define the minimum period of time an employee must serve with an employer before they’re eligible to make an unfair dismissal application if the employer terminates their employment.

The Minimum Employment Period depends on the number of employees employed by the business. For a business with 14 or fewer employees, the Minimum Employment Period is 12 months. Where the business has 15 or more employees, it’s six months.

A common question from members is whether an employee’s absence from work extends their probation period or Minimum Employment Period.

The answer depends on the reason for the employee’s absence.

Where the employee is on a period of unpaid leave, the period of leave will not count as service with the employer. For example, REEF was recently involved in a case where an employee was terminated by the employer exactly six months after the employment commenced. During the six month period, the employee had taken two days of unpaid personal/carer’s leave. The agency had 19 employees and therefore the applicable Minimum Employment Period was six months. Because of the two days’ absence, the employee had served less than six months and the Minimum Employment Period had not been met. Therefore, the employee was unable to bring an unfair dismissal claim against the employer.

An unpaid period of absence must be distinguished from paid leave (for example, personal/carer’s leave, annual leave etc), which will count as service for the purposes of the Minimum Employment Period. It’s also been determined in a case before the Fair Work Commission that an employee’s absence on workers’ compensation is to be counted as service.

The bottom line

It’s important to understand that even where an employee’s contract of employment contains a probationary period, the right for an employee to bring an unfair dismissal claim will be regulated by the Minimum Employment Period served by the employee; that is, either six months or 12 months, depending on the size of the agency.