Unfair Dismissal During Probation Period: Employer’s Guide In Australia

Bringing on a new team member is exciting - and the probation period is your chance to confirm the role, performance, and culture fit are right for both of you.

But what if it isn’t working out? Can you end employment during probation, and could that still count as unfair dismissal in Australia?

The short answer: it depends on the employee’s length of service and the size of your business. Even in probation, there are important legal rules to follow - especially around notice, final pay, and protections that apply from day one.

In this guide, we’ll explain how unfair dismissal laws interact with probation, the other legal risks you still need to manage, and a practical, step-by-step way to end employment lawfully and respectfully.

What Is A Probation Period?

Probation is an initial period at the start of employment that lets both you and the employee test the working relationship. Most probation periods run for three to six months, but the length is up to you and should be set out clearly in the Employment Contract.

Probation does not remove your legal obligations. Employees on probation still accrue entitlements (like annual leave for permanent staff), are covered by discrimination and general protections laws, and must receive proper notice (or pay in lieu) if you terminate - unless there is serious misconduct.

Does Unfair Dismissal Apply During Probation?

Whether an employee can file an unfair dismissal claim will generally turn on the minimum employment period under the Fair Work Act 2009 (Cth):

• 6 months for businesses with 15 or more employees
• 12 months for small businesses (fewer than 15 employees)

If you dismiss an employee before they complete the relevant minimum employment period, they usually cannot bring an unfair dismissal claim. However, they can still pursue other claims (more on those below), so you must still follow a fair and lawful process.

It’s also worth noting the Small Business Fair Dismissal Code. If you’re a small business and you dismiss someone after they pass the 12-month minimum employment period, compliance with the Code is important for defending an unfair dismissal claim. Even within the minimum employment period, using the Code’s principles (clear reasons, basic procedural fairness) is good practice.

“Probation Period Unfair Dismissal” - Is It A Separate Concept?

No. “Probation” is a contractual term. The Fair Work Commission looks at length of service and business size - not whether someone is “on probation.” In other words, probation doesn’t create a separate unfair dismissal regime. The key is whether the employee has reached the minimum employment period.

Other Legal Risks You Must Consider

Even if unfair dismissal doesn’t apply yet, other laws do - from day one. These are the main risks to manage carefully.

• General Protections (Adverse Action): It’s unlawful to dismiss an employee for prohibited reasons - for example, because they exercised a workplace right (requested leave, asked about pay), made a complaint, joined a union, or because of a protected attribute (like pregnancy, age, race, disability, or sex).
• Discrimination Laws: Federal and state laws prohibit discriminatory dismissals. If capability or performance is an issue, keep your reason factual and job-related, and document it.
• Notice Of Termination: Under the National Employment Standards (NES), you must give minimum notice (or pay in lieu) when you dismiss an employee, unless there is serious misconduct. For service under one year, that is at least 1 week. You can pay in lieu of notice even if your contract is silent. If an Award or Enterprise Agreement applies, check it for any additional requirements. For details on paying out notice correctly, see Payment In Lieu Of Notice.
• Final Pay: You must promptly pay outstanding wages, any accrued but unused annual leave, and superannuation owing. Our guide to Calculating Final Pay steps through what to include.
• Contractual / Policy Obligations: Follow any process your contract or policies require during probation (e.g. meetings, notice periods). Not doing so can create a breach of contract risk.

Important: The NES notice rules apply when the employer terminates. There is no NES minimum notice for an employee’s resignation - notice for resignation comes from the applicable Award or the employment contract.

How To End Employment During Probation (Step-By-Step)

If you’ve decided the role isn’t the right fit, a clear and respectful process helps you stay compliant and reduce risk. Here’s a practical sequence to follow.

1) Check Coverage: Contract, Award/EA, And Minimum Employment Period

Review the Employment Contract and any applicable Modern Award or Enterprise Agreement for probation terms, notice requirements and procedures. Confirm the employee’s start date and whether they’ve reached the minimum employment period based on your business size.

If performance or conduct is in question, ensure the reason is job-related and lawful. Where allegations are serious or disputed, a short, fair process (e.g. a written invitation, time to respond, and consideration of the response) is sensible. For more formal situations, a structured show cause letter can be appropriate.

2) Decide On Notice Or Payment In Lieu

Unless it’s serious misconduct, you must give at least the NES minimum notice or pay in lieu. Within the first year of service, that’s at least 1 week. You can pay in lieu of notice even if your contract doesn’t expressly say so. If an Award/EA requires more, follow the higher standard.

Immediate termination without notice is only lawful for serious misconduct (for example, theft, fraud, or violence). If you’re unsure whether conduct meets that threshold, get advice before acting.

3) Prepare The Termination Letter

Provide a written termination letter confirming the termination date, the notice (or pay in lieu), and what will be paid on finalisation (wages, accrued leave, superannuation). Keep the reason factual and non-discriminatory. If you are relying on unsuitability for the role (e.g. performance or fit), keep it clear and neutral.

4) Hold A Brief, Respectful Meeting

Meet with the employee to deliver the decision and the letter. Keep the conversation respectful and to the point. If you are concerned about a potential dispute, have a second manager present, and take brief notes.

5) Process Final Pay And Exit Steps

Make sure final pay is processed on time, company property is returned, systems access is removed, and records are updated. If you have a suite of documents for managing exits, such as an Employee Termination Documents Suite, put it to use here for consistency and compliance.

6) Maintain Good Records

Keep copies of the contract, performance notes, invitations to meetings, the termination letter, and the final payslip. These records are invaluable if questions are raised later.

For a deeper dive into the process and common pitfalls, see Terminating Employment During Probation.

Best Practices To Reduce Risk (And Maintain Goodwill)

Good processes reduce legal risk, protect your brand, and support a respectful workplace culture.

• Use Clear Contracts: Set the probation length, expectations, and notice in a tailored Employment Contract. Clarity up front prevents disputes later.
• Communicate Early: Don’t wait until the end of probation to raise issues. Provide feedback, expectations and (if appropriate) a short improvement plan.
• Be Consistent: Apply your approach consistently across probationary employees. Inconsistent treatment can fuel claims.
• Check Protected Reasons: Before deciding, pause and ask: could this dismissal be linked to a workplace right or protected attribute? If there’s any risk, seek advice.
• Follow Lawful Notice: Avoid “on the spot” terminations unless it’s serious misconduct. Use notice or pay in lieu, and make sure final pay is correct. If you need a refresher on how notice works, our Employment Notice Periods guide can help.
• Use A Simple, Fair Process: Even if unfair dismissal doesn’t apply yet, a short, fair process (tell them the concerns, let them respond, then decide) reduces general protections risk.
• Document Everything: Short, factual notes are enough - dates, who attended, what was said, and the outcome.

If you anticipate a dispute or a complex factor (for example, a recent complaint or a health disclosure), it’s wise to get tailored advice before you act. A short consult now can save significant cost later.

Key Takeaways

• Unfair dismissal generally doesn’t apply until an employee completes the minimum employment period (6 months for larger businesses, 12 months for small businesses) - “probation” itself doesn’t change that test.
• Even in probation, general protections, discrimination laws and other workplace rights apply from day one, so your reason for dismissal must be lawful and job-related.
• When the employer terminates, the NES requires minimum notice (or pay in lieu) unless there is serious misconduct; within the first year that is at least 1 week.
• Always process final pay correctly, including wages, accrued but unused annual leave, and superannuation, and keep clear records of your process.
• Clear documents and policies - including an Employment Contract and practical workplace policies - help set expectations and reduce risk.
• For structured terminations or dispute risks, consider using a show cause process and refer to practical resources like show cause letters and payment in lieu of notice guidance.

If you’d like tailored legal advice on probation, notice, or ending employment lawfully, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.