Probation periods in Australia: best practice
Reviewed by Mellow Editorial Team, HR & payroll content team
A probation period in Australia is a defined stretch of time — usually one to six months — during which both the employer and employee assess whether the role is a good fit. It does not remove the employment relationship or most of its legal obligations, but it does affect access to unfair dismissal protections under the Fair Work Act.
What the law actually says
Probation periods are not defined or created by the Fair Work Act — they are a contractual arrangement. What the Act does define is the minimum employment period: six months for employers with 15 or more employees, and 12 months for small business employers (fewer than 15 employees). An employee cannot make an unfair dismissal claim until that minimum period has passed.
This means a three-month probation period does not shield a larger employer from unfair dismissal risk if the employee is still employed at six months. The contractual probation label and the statutory minimum employment period are separate things. Align them, or you may create a gap in your process.
General protections claims — for example, where an employee alleges they were dismissed for exercising a workplace right or because of a protected attribute — apply from day one, regardless of probation. No probation period changes that.
Setting up probation properly
Write the probation terms into the employment contract before the person starts. Cover:
- Duration — be specific. "Three months from the commencement date" is clearer than "a probation period applies."
- Extension provisions — if you want the option to extend, say so, and state the maximum extension period. An extension without contractual authority can be contested.
- Review process — when formal check-ins happen and how performance is assessed.
- Notice during probation — this is often shorter than the post-probation notice period. Specify it clearly for both parties.
Award and enterprise agreement conditions still apply during probation. Annual leave accrues under the National Employment Standards from day one. Superannuation Guarantee obligations — currently 12% of ordinary time earnings — apply from the first eligible payment. PAYG withholding runs through Single Touch Payroll from the first pay event. None of these pause because someone is on probation.
Running a useful probation review
A probation period is only as useful as the conversations that happen during it. A common mistake is treating it as a passive waiting period, then making a rushed decision at the end.
Best practice looks like this:
Early in the period (week two or three): A short check-in to confirm the person understands their role, has what they need, and is settling in. Document it briefly.
Mid-point: A structured conversation against the expectations set out at the start. Note what is going well and where development is needed. If there are performance concerns, raise them here — not at the end.
End of period: A formal review. Either confirm the employee has passed probation (and say so in writing), or address concerns. If you are not extending an offer to continue, the employee is entitled to proper notice as per their contract and any applicable award.
Documenting each check-in is important. If a dismissal is later challenged on general protections grounds, your records show the decision was based on performance and fit, not a protected reason.
Ending employment during probation
Dismissal during the minimum employment period is lower risk from an unfair dismissal perspective, but it is not risk-free. General protections, discrimination law, and any applicable award or agreement obligations still apply.
Before dismissing someone on probation:
- Check whether a final written warning is required under any applicable modern award — some awards include disciplinary procedure requirements.
- Pay out any accrued but untaken annual leave.
- Provide the notice period stated in the contract (or pay in lieu), which must not be less than the minimum notice under the National Employment Standards or the relevant award.
- Issue a separation certificate if requested.
Do not assume that "they are still on probation" is a sufficient reason on its own. If asked why someone was let go, you should be able to point to specific, documented performance or conduct concerns.
Common mistakes to avoid
Setting probation shorter than the minimum employment period. A two-month probation for a business with 20 employees means you confirm or let go before the unfair dismissal safety net has even run. Consider whether your probation period and your minimum employment period are working together.
Failing to confirm the outcome in writing. If you do not formally confirm that probation has been passed, ambiguity can arise later about the terms of ongoing employment.
Ignoring the probation period entirely. Some managers treat probation as a formality and conduct no structured reviews. This wastes the purpose of the arrangement and leaves the business without documented evidence if the employment relationship deteriorates later.
Extending probation repeatedly without contractual authority. If your contract does not permit extension, doing so unilaterally may expose you to a claim that the employee's terms have been altered without consent.
A well-run probation period protects both parties. The employee gets clear expectations and honest feedback. The employer gets a documented, defensible process — and a genuine opportunity to build a successful working relationship from the start.
This article is general information only and does not constitute legal advice. For advice specific to your situation, consult a qualified employment lawyer or Fair Work adviser.
---
Run HR and payroll in Australia with Mellow
Mellow brings HR, payroll and 12 AI agents into one platform — built to handle Australia properly, with payroll included, from £4 per employee per month. The AI agents don't just answer questions; they generate contracts, run cost estimates and draft letters for you.
[Start a free trial →](/register)