A new attitude towards Probation Periods
Could terminating an Employee too close to the end of their probation period put an Employer at risk of a General Protections Dismissal Claim?
A recent decision of the Federal Court of Australia suggests employers need to be more cautious when terminating an employee’s employment during their probationary period. In this article the implications of this case are examined and we provide helpful guidance on ways in which this risk can be mitigated.
It is quite well known that employees who are terminated during their probationary period cannot lodge unfair dismissal claims against their former employer. However, as explored in our previous article, while the employee will not be able to commence unfair dismissal proceedings, this exemption does not apply to General Protections – Dismissal application to the Fair Work Commission and the Federal Circuit and Family Court of Australia. This means the employee could still challenge their termination during the probationary period if the employer has dismissed the employee for a prohibited reason under the General Protections provisions of the Fair Work Act 2009 (Cth).
A General Protections – Dismissal case currently in the Federal Circuit and Family Court of Australia suggests that a “prohibited reason” under the Act could extend to probationary terminations that are intended to prevent an employee from lodging an unfair dismissal claim. This view, if supported, could alter the way in which probationary reviews and terminations are conducted.
The background
The case is Dabboussy v Australian Federation of Islamic Councils [2024] FCA 1074 (‘Dabboussy Case’), and it adopts the reasoning used in the landmark High Court Decision Qantas Airways Limited v Transport Workers Union of Australia [2023] HCA 27 (‘Qantas Case’). The High Court in the Qantas case found that a “workplace right” extends to “workplace rights that might be exercised in the future after they come into existence and are therefore not presently existing.” When applied to the Dabboussy Case, Judge Nicholas outlined that Mr Dabboussy had established a prima facie case that he was terminated during his probation period in order to prevent him from exercising his prospective workplace right to lodge an unfair dismissal claim.
The context of the Dabboussy Case is that the Court was determining whether to make an interim order reinstating Mr Dabboussy while he awaits his General Protections – Dismissal hearing. In order to be reinstated, Judge Nicholas needed to be satisfied that Mr Dabboussy had established a prima facie case with sufficient likelihood of success.
The main elements of Mr Dabboussy’s case were as follows:
- Mr Dabboussy claimed he was terminated due to a making a workplace complaint on 12 August 2024; and
- Mr Dabboussy claimed he was terminated during his probation to prevent him from lodging an Unfair Dismissal.
In relation to the first element, Judge Nicholas found that Mr Dabboussy’s claim was weak, as Judge Nicholas could not see any basis for inferring that the 12 August 2024 complaint was a reason for Mr Dabboussy’s termination.
However, in relation to the second element, Judge Nicholas advised that there is a strong inference to suggest that the purpose of Mr Dabboussy’s termination was to deny him the opportunity to make a claim for unfair dismissal.
The key elements of the case have been summarised below:
- Mr Dabboussy was employed as the CEO of the Australian Federation of Islamic Councils (‘AFIC’) on 4 September 2023. As AFIC is a small business, Mr Dabboussy’s employment was subject to a 12-month probation period, meaning he could not lodge an Unfair Dismissal until after 4 September 2024.
- On 28 July 2024, AFIC received a complaint from a new employee (‘Complainant’) alleging that Mr Dabboussy had engaged in sexual harassment towards her during a meeting that occurred on 24 July 2024.
- On 9 August 2024, Mr Dabboussy was notified of the allegations against him and stood down from his employment pending an investigation into his conduct.
- On 12 August 2024, Mr Dabboussy submitted his own complaint to AFIC, outlining his concerns that he hadn’t been provided procedural fairness. The nature of Mr Dabboussy’s concerns included:
- His belief that AFIC had prejudged the outcome;
- His concern that certain investigative steps that were discussed with him were not included in the Allegations Letter; and
- His concern that the Allegations Letter did not list an invitation for his response.
- On 14 August 2024, AFIC notified Mr Dabboussy that they had appointed WorkLogic to conduct an independent investigation into the allegations, and that Worklogic would be in contact with Mr Dabboussy as soon as practicable.
- On 28 August 2024, Ms Croker of Worklogic conducted an interview with Mr Dabboussy and investigated the allegations against him.
- On 2 September 2024, an emergency meeting with the AFIC Executive Council was called to discuss a draft investigation report from WorkLogic which substantiated the allegations against Mr Dabboussy. A vote was conducted in the meeting and a unanimous decision was made to summarily terminate Mr Dabboussy if the finding in the draft report was maintained in the final report.
- On 3 September 2024, Ms Croker provided AFIC with a Final Investigation Report. The Investigation Report substantiated that sexual harassment had been engaged in by Mr Dabboussy.
- On 3 September 2024, Mr Dabboussy was summarily dismissed from his employment.
Outcome
In making a decision that Mr Debboussy had established a prima facie case, Judge Nicolas outlined that the calling of the emergency meeting to discuss Mr Dabboussy’s termination one day before his probationary period would cease suggested that the real reason for Mr Dabboussy’s termination was to prevent him from exercising his right to lodge an unfair dismissal claim. However, Judge Nicholas acknowledged that Mr Dabboussy’s case could be hindered by Ms Croker’s investigation report and the findings AFIC relied on in justifying the summary dismissal.
If Judge Nicholas’ views are supported in Mr Dabboussy’s General Protections – Dismissal case, the decision will have significant implications for the risks employers need to consider when terminating employment during probationary periods. Specifically, employers will need to mitigate the risk of an employee’s claim that they have been terminated during their probation to prevent them from exercising their future workplace right to lodge an unfair dismissal. This means employers will need to be able to show that the employee was terminated for a reason other than to prevent them from lodging an unfair dismissal.
Examples of actions employers could take to achieve this include:
- Not rushing a termination solely to ensure it falls within a probationary period;
- Not waiting until the end of the probationary period to terminate an employee;
- Scheduling probation check-in meetings throughout a probation period to keep the employee updated on their progress;
- Conducting a half-way probation review to inform a decision to terminate an employee earlier than the end of the probation period; and
- Ensuring there is a documented history of performance and conduct concerns to support that the termination was not due to the proximity to the end of an employee’s probation period.
The full effect of the Dabboussy Case will not be known until a decision on the General Protections – Dismissal claim is made.
In the meantime, the actions listed above can assist with ensuring employers are in a secure position for their upcoming probation terminations if the Dabboussy decision is upheld.
Connect with us
If you have concerns regarding probationary periods, dismissal processes or potential General Protections claims (or any other Industrial Relations matters), please contact us here and one of our Workplace Strategists will be in touch within 24 hours.