How To Issue A Probation Period Termination Notice In Australia

Probation is a helpful tool for Australian small businesses. It gives you time to confirm a new hire is the right fit, and if not, to move on quickly.

But “quickly” doesn’t mean “without process”. Even during probation, you still have obligations around notice, pay, and compliance with Australian workplace laws.

In this guide, we’ll explain how probation works, what probation period termination notice you need to give, and the practical steps to end employment fairly and lawfully. You’ll walk away with a clear checklist and the key documents to put in place.

What Is Probation, And How Does It Fit With The Law?

Probation is a contractual period at the start of employment where you and the employee assess suitability. It’s typically 3-6 months, but the length is up to you (and should be set out in the Employment Contract).

Probation itself isn’t defined in legislation, but two legal concepts matter during this time:

• Minimum Employment Period (unfair dismissal): Employees cannot make an unfair dismissal claim until after the minimum employment period - 6 months for employers with 15+ employees, or 12 months for small businesses with fewer than 15 employees.
• National Employment Standards (NES) notice: Minimum notice requirements still apply (unless serious misconduct). Probation doesn’t “turn off” notice obligations.

In short: probation can reduce the risk of unfair dismissal claims if things don’t work out, but other risks and obligations still exist (like general protections, discrimination, and proper notice/payment).

How Much Termination Notice Do You Need To Give During Probation?

Start with the Employment Contract, modern award or enterprise agreement. Many contracts specify a shorter notice period during probation (commonly 1 week). If your contract says so, follow that.

If the contract or applicable award is silent or sets a longer period, the NES minimum notice applies:

• Less than 1 year of service: 1 week’s notice.
• 1-3 years: 2 weeks.
• 3-5 years: 3 weeks.
• 5+ years: 4 weeks.
• Add 1 extra week if the employee is over 45 years and has at least 2 years’ continuous service.

Probation usually falls under “less than 1 year”, so 1 week is common if your contract doesn’t say otherwise. For a deeper dive on calculating the correct amount, it’s worth checking this overview of employment notice periods.

A few other points to keep in mind:

• Casuals: Usually no notice is required (unless an award or contract says otherwise) because casuals are engaged per shift with no firm advance commitment.
• Serious misconduct: If you’re ending employment for serious misconduct, you can dismiss without notice. Be cautious here; make sure the conduct truly meets the threshold and follow a fair process.
• Award or agreement: Some awards/agreements set specific notice rules during probation or for particular classifications. Always check the applicable instrument.

Can You Use Pay In Lieu Of Notice Or Garden Leave?

Yes. Employers can either have the employee work out their notice or pay them instead of requiring them to work.

• Pay in lieu of notice: You pay what the employee would have earned had they worked the notice period. This can be a clean and respectful way to separate quickly while meeting your obligations. See the guide on payment in lieu of notice to avoid common pitfalls (for example, calculating loadings and benefits correctly).
• Garden leave: If your Employment Contract allows it, you can direct an employee to stay away from work during their notice period while remaining on full pay. This can help protect clients, data, or team culture during transition, especially for customer-facing or sensitive roles. You can read more about the concept of garden leave and when it’s used.

Choose the option that best manages risk and disruption to your operations. Whatever you choose, ensure your letter of termination clearly sets out dates, notice arrangements and final pay details.

Step-By-Step: How To Terminate Employment During Probation Fairly

Even though probation can lower unfair dismissal risk, a fair, consistent process still matters. It reduces the chance of general protections or discrimination claims and shows respect to your team.

1) Check Your Documents First

• Review the employee’s Employment Contract for the probation length, notice period, garden leave, and any assessment criteria or review meetings promised.
• Confirm whether a modern award or enterprise agreement applies and whether it sets notice or process requirements.

2) Consider Performance Feedback And Records

• Ideally, probation includes check-ins and feedback. If concerns were raised, keep records of dates, topics, and expectations discussed.
• While you don’t need a lengthy performance management cycle, it’s sensible to point out issues early and give a short, reasonable opportunity to improve where practicable.

3) Assess Legal Risks (Beyond Unfair Dismissal)

• Avoid decisions that could be seen as discriminatory (for example, related to protected attributes) or adverse action because the employee exercised a workplace right (like making a complaint or taking leave).
• If alleged conduct is involved, think about whether a brief investigation or a show cause letter is appropriate to ensure procedural fairness.

4) Decide Notice Option (Worked, In Lieu, Or Garden Leave)

• Confirm the correct notice amount, then decide whether the employee will work it, be paid in lieu, or be placed on garden leave if your contract allows.
• Prepare a clear letter confirming the termination date, last day of work (if different), and what will be paid on termination.

5) Deliver The Decision Respectfully

• Meet privately (in person or by video). Keep it concise and respectful.
• Provide the termination letter, explain next steps, and answer reasonable questions about logistics, property returns, and final pay timing.

6) Calculate Final Pay Correctly

• Pay all amounts due: wages to the final day, pay in lieu (if applicable), unused accrued annual leave for permanent employees, and any applicable loadings or allowances.
• Check award or agreement rules around timing and components, and ensure superannuation is handled correctly where required.

7) Close Out Access And Property

• Collect keys, devices, cards and any confidential information, and revoke system access promptly.
• Document the handover to ensure continuity for clients and your team.

For a broader overview of legal guardrails and best-practice process, this guide to terminating employment during probation sets out the main issues employers should consider.

Common Mistakes Employers Make During Probation (And How To Avoid Them)

• Assuming “no notice” applies during probation: Unless it’s serious misconduct, you still owe notice or pay in lieu. If in doubt, check your contract and the notice period rules.
• Relying on the minimum employment period alone: Reduced unfair dismissal risk does not protect you from general protections or discrimination claims. Keep decisions based on performance, role requirements, or legitimate business needs, and document this.
• Missing award or agreement requirements: Some instruments include extra termination steps or notice. Always confirm what applies to your workplace.
• Not documenting feedback: A short probation doesn’t excuse a complete lack of feedback. Quick check-ins and brief records go a long way.
• Incorrect final pay: Underpaying or delaying termination payments can create disputes. If you choose pay in lieu of notice, calculate it carefully.
• Overlooking leave questions: Permanent employees accrue annual leave from the start and personal (sick/carer’s) leave if eligible. If leave intersects with probation, see this employer-focused guide to taking leave during probation.

What Should Your Contract And Policies Say About Probation?

Good paperwork makes probation smoother and less risky. At a minimum, ensure your Employment Contract clearly covers:

• Probation length: For example, 6 months with the option to extend once (if you want flexibility). Make sure any extension right is stated.
• Notice during probation: Many employers specify 1 week during probation, then a longer period after confirmation. Keep it consistent with any applicable award.
• Assessment process: Optional, but brief wording about reviews or check-ins sets expectations.
• Garden leave and pay in lieu: Include these levers so you can manage risk at the end of employment.
• Post-employment obligations: Depending on the role, consider confidentiality and reasonable restraints tailored to your business interests.

If you’re updating or creating templates, starting with a professionally drafted Employment Contract and an employee termination documents suite will help you stay consistent and compliant when running probation cycles.

FAQs Employers Ask About Probation Notice

Does probation reduce my notice obligations?

No. Probation doesn’t remove your NES notice requirements (unless serious misconduct). Your contract or award may set a specific probation notice period; otherwise, apply the NES minimums.

Can I end employment effective immediately?

Only for serious misconduct and with a fair process. Otherwise, you’ll need to give notice or pay in lieu. Immediate terminations for performance or “not the right fit” should be accompanied by the correct notice arrangements.

Do I have to give reasons during probation?

You’re not legally required to provide detailed reasons, but it’s sensible to give a brief, factual rationale and keep your decision anchored to role suitability or performance. That helps reduce risk of a general protections claim.

What notice applies to casuals on probation?

Casual employees typically don’t have a notice entitlement (unless an award or contract says otherwise). Check your instrument and contracts.

Should I ask for a resignation instead?

It’s reasonable to offer a mutual exit where appropriate, but never pressure an employee to resign. If you’re ending the employment, follow your normal termination process and notice obligations.

Key Legal Documents To Support A Smooth Probation Process

• Employment Contract: States probation length, notice during probation, garden leave and pay in lieu options, and post-employment obligations tailored to the role.
• Probation Review Template: Simple check-in form to record feedback and expectations at set intervals.
• Performance/Conduct Process Documents: Where concerns arise, tools like a show cause letter can support procedural fairness.
• Termination Letter: Confirms the decision, last day, notice/pay in lieu, and final pay components. A robust termination documents suite keeps this consistent.
• Workplace Policies: Clear policies (conduct, performance, leave, privacy/IT) make expectations clear from day one.

Key Takeaways

• Probation helps you assess fit, but it doesn’t remove your obligations to provide the correct probation period termination notice (or pay in lieu) under the NES or applicable award/contract.
• Most permanent employees with less than 1 year’s service require 1 week’s notice, unless your Employment Contract specifies otherwise or serious misconduct applies.
• Decide whether notice will be worked, paid in lieu, or managed via garden leave if your contract allows.
• Keep your process fair: document feedback, avoid discriminatory reasons, and consider a short opportunity to improve where practicable.
• Use clear, tailored documents - a solid Employment Contract and consistent termination letters - to reduce risk and confusion.
• If you’re unsure about timing, notice or risks, check these guides on notice periods and terminating during probation, or speak with a workplace lawyer early.

If you’d like a consultation on managing probation period termination notice at your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.