Probation periods provide employers with an opportunity to assess whether a new employee is suitable for their role. For real estate employers, situations can arise where an employer needs additional time to evaluate an employee’s performance, conduct or overall suitability for the role.
Real estate employers often ask whether a probation period can be extended and what process should be followed to minimise legal and employee relations risks. While extending probation may be possible, it is not simply an administrative decision. Employers must first consider whether their employment contract permits an extension and ensure any extension is managed carefully.
A probationary period is a contractual mechanism, not a statutory entitlement. It exists only to the extent that it is provided for in an employment contract. Whether it can be extended will depend on the terms of the employment contract.
Generally, there are three common scenarios:
Where the contract contains an express right to extend probation, the employer should exercise that right before the original probation period expires and confirm the extension in writing.
If the contract is silent, or requires mutual agreement, the safest approach is to obtain the employee’s written consent before the probation period ends. One of the most common mistakes employers make is allowing a probation period to expire and then attempting to retrospectively extend it.
Real estate employers that are constitutional corporations are covered by the Fair Work Act 2009 (Cth) (FW Act). It is important to note that there is a distinction between a contractual probation period and the statutory minimum employment period for unfair dismissal claims. The FW Act does not refer to probationary periods, and eligibility for unfair dismissal does not depend on probation periods or extensions.
In practice, extending an employee’s probation period does not extend the statutory qualifying period for unfair dismissal.
Even where an employee is still within a probation period, they may still have access to legal remedies under the FW Act, including general protections claims.
Sole traders, trusts and unincorporated partnerships are generally covered by the Western Australian (WA) state industrial relations system. While probation periods are still contractual rather than statutory, they carry greater significance because the WA Industrial Relations Commission must consider whether an employee was on probation and employed for less than three months when assessing an unfair dismissal claim. However, probation does not provide an automatic defence to unfair dismissal.
When concerns exist regarding an employee’s performance, conduct or suitability, employers should adopt a structured and transparent approach.
To effectively manage a probation extension, employers should monitor probation end dates and address any concerns before the probation period expires. Meet with the employee to discuss performance concerns, explain the standards required for the role, and identify any areas needing improvement.
If additional assessment time is required, explain the reasons for the extension, agree on a reasonable extension period, and set clear performance objectives and review milestones. The extension should be confirmed in writing, including the duration, expectations and review process, with ongoing feedback provided throughout the extended probation period.
A well-managed probation extension can provide valuable additional time to assess an employee’s suitability. However, a poorly handled process can expose the business to unnecessary legal, contractual and employee relations risks.
Businesses should also remember that probation is not a substitute for effective performance management. Employees should receive clear feedback, support and reasonable opportunities to improve throughout the employment relationship.
Probation periods are contractual, so any extension must be permitted by the employment contract or agreed to by the employee before the original probation period expires. Employers should remember that extending probation does not extend unfair dismissal qualifying periods under the FW Act, and that clear communication, documented expectations and ongoing performance management remain essential.
Employers needing advice on extending probation periods can contact the Employee Relations Helpline on 08 9365 7660 or email advice@cciwa.com.
Written By Antaya Adebahr-Strahan – Employee Relations Adviser
CCIWA, Business Law WA and REEFWA has taken all reasonable care in preparing this document. The contents of this document do not constitute legal advice and should not be relied upon as such. Specific advice for your situation should be sought from CCIWA, Business Law WA or a professional adviser before any action is taken. Neither REEFWA, CCIWA nor Business Law WA accept responsibility for any claim that arises from any person acting or refraining from acting on the information contained in this document.
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