For Australian employers, the probation period is a critical risk-management window. It allows you to assess whether a new employee meets performance expectations, fits your culture and demonstrates the capability required for the role.
But can you legally terminate an employee during probation?
The short answer is yes — however, probation does not remove your obligations under the Fair Work Act 2009 (Cth), the National Employment Standards (NES), modern awards or anti-discrimination laws.
For a broader overview of managing probation effectively, see E.L Blue’s detailed probation period guidelines.
What Does Probation Mean for Termination Rights?
A probation period is a contractual arrangement — not a separate legal category of employment.
Typically between three and six months, probation allows employers to:
- Monitor performance and competency
- Assess reliability and cultural fit
- Provide structured feedback
- Determine long-term suitability
However, probation does not remove statutory employee protections. Even during probation, employees are entitled to:
- Minimum notice
- Protection from unlawful discrimination
- General protections under the Fair Work Act
From a compliance perspective, probation is best viewed as a structured evaluation window — not a simplified termination mechanism.
Is Termination During Probation Always Legal?
Employers can terminate employment during a probation period if:
- The employee is underperforming
- They lack required skills or competencies
- There are behavioural or conduct concerns
- They are not a cultural fit
- Operational requirements change
However, termination is unlawful if it is for a prohibited reason, including:
- Discrimination (age, race, sex, disability, pregnancy, etc.)
- Exercising a workplace right (e.g. taking leave, making a complaint)
- Temporary absence due to illness
- Union involvement
Probation does not shield employers from legal scrutiny. If challenged, the employer must demonstrate that termination was based on legitimate performance or operational grounds.
Notice Period Requirements During Probation
Even during probation, most permanent employees are entitled to notice period under the National Employment Standards.
For employees with less than one year of service, the NES requires:
- At least 1 week’s notice, or
- Payment in lieu of notice
Important considerations for employers:
- Check the employment contract — it may require longer notice.
- Check applicable awards or enterprise agreements.
- Casual employees (properly classified) are generally not entitled to notice.
- Summary dismissal (without notice) is only lawful in cases of serious misconduct.
Failing to provide correct notice can expose your business to underpayment claims.
Unfair Dismissal and Probation
A common misconception is that probation automatically prevents unfair dismissal claims.
In reality, unfair dismissal eligibility is based on the minimum employment period, not the probation clause.
An employee must have completed:
- 6 months’ service (if your business has 15 or more employees), or
- 12 months’ service (if your business is a small business with fewer than 15 employees)
If termination occurs before the relevant minimum period, the employee generally cannot pursue unfair dismissal.
However, they may still lodge:
- General protections (adverse action) claims
- Discrimination claims
- Breach of contract claims
This is why documentation and procedural fairness still matter during probation.
Adverse Action Risks
General protections claims present one of the biggest legal risks for employers terminating during probation.
Unlike unfair dismissal:
- There is no minimum service requirement
- The burden of proof can shift to the employer
- Compensation can be significant
An employee may allege termination occurred because they:
- Made a complaint about pay or safety
- Took personal or parental leave
- Requested flexible work arrangements
- Exercised a workplace right
To mitigate risk, ensure your termination decision is clearly supported by documented performance or conduct issues unrelated to protected rights.
Best Practice Steps Before Termination
To reduce exposure and strengthen defensibility, employers should follow structured processes during a probation period.
- Clearly Define Expectations Early
- Provide written KPIs and behavioural expectations.
- Confirm performance standards in writing.
- Schedule formal probation review dates.
Clear expectations reduce dispute risk.
- Provide Feedback and Opportunity to Improve
Even though not legally required in all probation situations, best practice includes:
- Conducting review meetings
- Providing documented feedback
- Offering reasonable improvement opportunities
- Keeping file notes
This strengthens your position if termination is challenged.
- Review Legal and Contractual Obligations
Before terminating:
- Check employment contract terms
- Confirm notice requirements
- Review award coverage
- Assess general protections risk factors
A brief legal review can prevent costly claims.
- Conduct a Professional Termination Meeting
- Communicate the decision clearly and respectfully
- Avoid emotional or vague explanations
- Confirm notice/payment arrangements
- Provide final pay timeline
Avoid referencing protected characteristics or recent workplace rights activities.
- Finalise Entitlements Promptly
Ensure payment of:
- Outstanding wages
- Accrued but unused annual leave
- Notice (if applicable)
Final pay must be processed in accordance with legal and contractual requirements.
Key Takeaway for Employers
Yes, you can terminate employment during a probation period in Australia — but probation is not a legal shield.
The safest approach is to:
- Document performance issues
- Follow structured review processes
- Ensure termination is based on legitimate reasons
- Comply with notice and statutory obligations
When managed properly, a probation period protects your business while maintaining compliance and fairness.
For further guidance on structuring and managing probation effectively, review E.L Blue’s comprehensive probation guide here.