Don't rush to terminate an employee during their probation period

It's a common misconception that terminating an employee's employment during a probation period provides employers with immunity against any subsequent legal claims by the terminated employee. While, in general, this will apply for unfair dismissal claims, as the following case demonstrates, employers may be exposed to other claims, for instance a general protections claim, where hasty decisions to terminate are made. 

BACKGROUND

Under the Fair Work Act 2009 (the Act), an employee is protected from an unfair dismissal if they have been employed for at least the "minimum employment period". 

The minimum employment period is one year for small business employers (employers with 14 or less employees) or six months for employers with 15 or more employees. 

The minimum employment period applies regardless of any probationary period which may be stipulated in the employee's contract of employment. 

There is no such minimum employment period under the general protection provisions of the Act which makes it unlawful for an employer to take adverse action (including termination) against an employee because amongst other reasons, the employee exercised or proposed to exercise a "workplace right".

A workplace right includes amongst other factors, the ability of an employee to make a complaint or inquiry about his or her employment.

THE FACTS IN THIS CASE

The employee, Mr Anderson was engaged by BNP Paribas Securities Services (BNP) as a Client Government Analyst on 6 January 2014. Mr Anderson was subject to a three month probation period in his contract of employment. 

On 19 March 2014, Mr Anderson complained to human resources about his supervisor, Mr MacRae confronting him for being absent from his desk.  

The next day, Mr MacRae had a probation appraisal with Mr Anderson during which he informed Mr Anderson there were concerns about his performance but offered to extend his probation period. Mr MacRae at this point was unaware of the complaint against him. 

A further meeting occurred on 25 March 2014 between Mr Anderson, Mr MacRae and human resource staff to discuss Mr Anderson's future at BNP. During the meeting, Mr Anderson was again critical of Mr MacRae and the workplace culture of the team lead by Mr MacRae. 

Mr MacRae subsequently withdrew the offer to extend Mr Anderson's probation period and later that day, recommended to his Manager, Mr Munro and the Human Resource Manager that Mr Anderson's employment be terminated.

Mr Anderson was asked on three separate occasions by human resource staff if he wished to formalise his complaints, to which he responded he did not.

The next day and despite human resource staff concerns that due process regarding Mr Anderson's complaints had not been followed, Mr Anderson was dismissed for failing to perform to the required level and due to BNP's view that his performance was unlikely to improve.

Mr Anderson filed an application with the Federal Circuit Court alleging BNP had contravened the general protections provisions of the Act by terminating his employment due to him exercising a workplace right.

DECISION

Did Mr Anderson exercise a workplace right?

In considering if BNP had contravened the general protections provisions, the Court considered if Mr Anderson had exercised, or had purported to exercise a workplace right by making a complaint. 

BNP argued that a refusal by Mr Anderson to make a formal complaint meant the discussion did not constitute a complaint. The Court dismissed this view and found the discussion was "no doubt" a complaint for the purposes of the Act and although "Mr Anderson did not formally pursue his complaint but neither did he abandon it."

Further although human resource staff apologised to Mr Anderson for Mr MacRae's conduct, Mr Anderson's concerns about the broader issues of the workplace culture were never addressed.

Was the complaint in part, or wholly the reason for dismissal?

Once the Court was satisfied a workplace right was exercised, the onus of proof fell on BNP to show it did not terminate Mr Anderson, either in part or wholly due to his exercising that workplace right.

The Court found Mr Anderson's complaint was, in part, a factor in the decision to terminate him. In reaching this decision, the Court stated:

" Mr Anderson was viewed as a trouble maker because of his combative attitude at the meetings on 19, 20 and 25 March. He was accused of being a "clever dick" or a "smart arse".  In my opinion, that description was accurate. Nevertheless, the complaint about Mr MacRae by Mr Anderson could not be so lightly dismissed. The dismissal of Mr Anderson was certainly not an appropriate response to that complaint."

In reaching this decision the Court considered that:

• no prior concerns were raised regarding Mr Anderson's performance prior to the 19 March 2015 meeting;
• Mr Anderson's informal complaint was a factor in the decision to terminate his employment; and
• BNP had formed the view that if it terminated Mr Anderson after the probation period had expired, that he would be eligible to bring an unfair dismissal claim and for this reason, rushed to terminate his employment without following due process in relation to his complaint.

The Court will hear the parties on compensation and penalties at a later date.

LESSONS

The decision provides important reminders to ensure that:

• complaints and inquiries made by employees are appropriately considered and addressed including ensuring due process is followed;
• raising performance concerns with employees at an early stage during the minimum employment period; and
• ensuring decisions to terminate employees, even during the minimum employment period are well considered and not rushed.

If you would like to know more about this case or termination of employment  generally, please contact National Workplace Lawyers on  +61 2 9233 3989.

National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.