Probation periods are often misunderstood in the employee onboarding process. A legal expert clarifies how HR can get it right.

A probation period can seem like a safety net for employers. But legally, probationary periods in Australia aren’t as simple as they seem. 

Misunderstanding the legal framework can lead to unfair dismissal claims, breach of contract disputes and costly legal headaches. Employers who fail to grasp the nuances of these legal principles may find themselves entangled in disputes that could have been easily avoided.

How can HR practitioners ensure compliance while making the most of probationary periods? 

Mistake #1: Assuming a probationary period overrides unfair dismissal laws

Many employers believe if an employee is still within their probationary period, they can be dismissed without risk. However, under the Fair Work Act, what really matters is the minimum employment period, not the probationary period in an employment contract. This distinction is crucial in understanding an employee’s rights and an employer’s obligations.

Key legal distinction:

• Employers with 15+ employees have a six-month minimum employment period 
• Employers with fewer than 15 employees have a 12-month minimum employment period

During this period, employees can’t bring an unfair dismissal claim. However, once they pass this threshold, they gain protection, regardless of whether they are still on probation. 

Best-practice tip for HR: Align probationary periods with the minimum employment period to avoid confusion. If an employer sets a three-month probationary period but dismisses an employee at five months, the employee is still within the minimum employment period. However, they are outside their contractual probation. This could lead to a breach of contract claim if the termination does not comply with the contract terms. 

Mistake #2: Extending a probationary period without legal consideration

Once an employee reaches the minimum employment period, they gain unfair dismissal protection, regardless of any probation extension.

The Fair Work Commission has ruled against employers who extended probation to delay unfair dismissal protections. In many cases, employees were awarded significant compensation. Such cases highlight the importance of ensuring that any probation extensions are properly documented and justified.

Best-practice tip for HR: Employers must carefully assess whether an extension genuinely serves a business need or if it’s merely delaying an inevitable decision. If an extension is necessary, ensure there is a clear and well-documented, mutual agreement with the employee. 

Employers should also document the reasons for the extension and provide specific feedback to justify their decision. 

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Mistake #3: Relying on a probationary period instead of a fair dismissal process

A probationary period is not a free pass to terminate employment without due process. Even if an employee is within their probationary period, employers must comply with contractual notice periods, anti-discrimination laws and general protections under the Fair Work Act.

For example, an employee could claim their dismissal was due to unlawful reasons, such as pregnancy, disability or union activity – all of which are protected under general protections. Unlike unfair dismissal claims, general protections claims can be lodged from day one of employment.

Employees dismissed during probation can also bring claims under other workplace laws, including:

• Workplace health and safety laws, if they believe their dismissal was linked to raising safety concerns.
• Workplace bullying claims, which don’t have a minimum employment period.
• Breach of contract claims, if an employer fails to provide notice or entitlements.

Best-practice tip: Keep records of performance concerns or behavioural issues to justify your decision if a claim arises. 

If terminating employment, ensure the contractual notice is met; the decision is not discriminatory; and there is a clear, lawful reason for terminating.

By aligning probation with the minimum employment period, following a fair termination process and ensuring contracts are well-drafted, HR practitioners can reduce risk while supporting fair and effective employment decisions.

A version of this article originally appeared in the April/May 2025 edition of HRM Magazine. All information in this article is general in nature and does not constitute legal advice.

Sanam Ahmadzadeh Salmani is an in-house lawyer at Employment Hero and podcast host of Law Lenz: Employment Law Done Right.