Why Probationary Periods Can Create Contractual Risk for Employers

A “probationary period” doesn’t appear in any employment statute.

Whatever legal force it has comes entirely from the contract of employment.
And if that clause is loose, it’s close to meaningless — both for enforcement and for management.

But here’s the contract trap. Put a probationary clause in the contract and then ignore it, and you create risk.

Dismiss without following your own contractual probation process and you open the door to a breach of contract claim.

That's additional contract damages on top of notice period benefits.

The contractual rights mentioned above apply to both employees and workers, e.g. 'casuals' and seasonal workers. Because both categories will have a contract.

If there’s a contractual term, written or verbal that can be evidenced, about how that probation period operates or what leads to continued work, it can be enforced.

So saying something to the 'casual' worker like “ Do well over the next month and we'll keep you on for another month” could trigger a contract claim, if you arbitrarily dismiss after a say week.

Or dismissing an employee arbitrarily without any real attempt at a probationary process.

But, in honesty, it is very rare that a claim under the contract would be brought – particularly by workers.

What follows is the 'real contract deal' under the contract

Most sensible employers will want a probationary period.

But to make it work, the period needs to be precisely defined in the contract— not just “6 months and see how it goes.”

It needs measurable standards, adjusted for the reality that someone five months in won’t perform like a five-year employee.

Crucially, it needs to be actively managed — reviewed, evidenced, acted on.
If you’ve spent time and money recruiting someone, the investment shouldn’t stop on day one.

The employee needs to know what good looks like.

The employer needs to react when 'good' isn't being achieved.

From 1st July this year, you will have months, not years, to decide whether an employee is right for the role.