Business pays $10,000 in compo to fired employee despite dismissing them during probation period

A recent decision of the Federal Circuit Court of Australia has shown why employers must always exercise care when seeking to dismiss employees – even during their probation period.

In Pacheco-Hernandez v Duty Free Stores Gold Coast Pty Ltd, an employer was ordered to pay $10,000 in compensation to a former supervisor who had been dismissed five months into her probation period.

At the time of the dismissal, the employer’s HR manager and area manager advised the supervisor that the employer was not obligated to provide a reason for terminating her employment. Absent any reason, the supervisor claimed that her employment had been terminated because she had made complaints about other team members.

Based on the evidence before it, the Court could not be satisfied that the supervisor’s complaints were not a substantial and operative factor in the employer’s decision to terminate the supervisor’s employment and found that the employer had contravened the general protections provisions of the Fair Work Act.

It is important to note that this decision was not one relating to unfair dismissal.

Rather, the employee had made a claim under the general protections provisions of the Fair Work Act, which prohibit employers from engaging in adverse action against an employee (e.g. terminating their employment) for a prohibited reason (e.g. exercising a workplace right to make a complaint).

There is a common misconception that dismissing an employee during their probation period means that the employer is protected from any subsequent claims that may be brought by that employee and therefore, the employer does not have to give a reason for the dismissal. This is not always the case and the risk of legal proceedings being brought against an employer still exists during the probation period.

Employees, whose employment is terminated in the probationary period, will not be able to make a claim for unfair dismissal because they will not have worked the ‘minimum employment period’, which is a threshold requirement to access the unfair dismissal jurisdiction of the Fair Work Act (for small businesses the minimum employment period is twelve months and for all other businesses it is six months).

Despite this, probationary employees are still entitled to make other claims – as evidenced in this case. Employers must therefore ensure that any dismissal, even during a probation period, does not fall foul of the general protections provisions of the Fair Work Act or any other applicable legislation (such as discrimination laws).

If there is any risk of a claim being brought by an employee, legal advice should be sought prior to any action being taken.

This post first appeared on the Workplace Law blog and was republished with permission.

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