A small business employer is an employer who has less than 15 employees by head count. The employer must count all employees including casual employees who are employed on a systematic and regular basis. The employer must also count employees of associated entities e.g. entities related by shareholding or otherwise controlled by the same person.
If the employer is a small business employer, the employer will be entitled to a 12 month statutory probation period when employing an employee. If the employee is dismissed during this period, the employee does not qualify for unfair dismissal. Importantly though they may still be entitled to other relief if their dismissal was unlawful, for example, due to harassment, bullying or discrimination. Therefore, employers should still take care when managing and dismissing employees even those who may not qualify for unfair dismissal.
Small business employers should use the first 12 months of employment to assess the performance and conduct of the employee and ensure that if management action is required, it is done before the first anniversary of their employment. This substantially reduces the risk of an unfair dismissal claim being commenced.
Employers who are not small businesses (15 plus employees), will only have access to a six month statutory probation period from the commencement of an employee’s employment. The same comments though apply. The first 6 months of employment should be used to assess the performance and conduct of the employee and appropriate management action (if necessary) should be taken before the 6 month period expires.
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