The contents of this article are correct as at 22 April 2011.
The Department has indicated that there will be numerous changes to policy under the Employer Nomination Scheme (ENS).
One such policy change is that the Department will no longer accept extended employment probationary periods.
One of the legal requirements that an employer needs to satisfy under ENS is that the appointment must provide the employee with full-time employment and be for at least 3 years, and not be subject to any express exclusion of the possibility of renewal.
The law does not expressly prohibit or even refer to probationary periods that are permissible in employment agreements.
Up until recently Departmental policy suggested that a flexible approach should be taken with the duration of probationary periods, which could, depending of the seniority of the position and that nature of the industry, be more than 6 months. Indeed, for senior appointments the position could be in excess of 12 months.
It seems that the Department has announced policy which provides that probationary periods of more than 6 months, will no longer be accepted.
The Department has commented that the strict 6 month policy regarding probationary periods has always been in place.
This is at odds with the prior practice of the Department, where probationary periods of 12 months and at times up to 3 years were acceptable for senior positions.
At the time of writing this article, the new ENS policy has yet to be released by the Department.
In our view there is significant doubt whether the new policy is lawful.
As a practical matter, the inflexibility of the new policy is likely to cause significant hardship for:
Employers and potential applicants who are subject to an Enterprise Agreement which stipulate probationary periods of more than 6 months; and
Employers seeking to nominate persons for senior positions, where it is acceptable industry practice to use extended probationary periods.
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