Probation will not protect your business the way you expect
Most small businesses treat probation as a safety net. Hire someone, see how they go, and if it does not work out, end it. That is a reasonable assumption. It is also wrong, and it is how sound business decisions turn into claims.
The date in your contract is not the date that matters
"Probation" has no meaning in the Fair Work Act. It is a term in the employment contract. It sets a shorter notice period and gives you a point to assess suitability. It does not control whether the employee can make a claim.
The Act does that through the minimum employment period. An employee cannot claim unfair dismissal until they have completed six months, or twelve months if you are a small business employer (fewer than 15 employees). Your contract might say three months. If you are working from that date, you are working from the wrong one.
What seems logical, and what the law says
"Probation means no claim risk." Only unfair dismissal is affected, and only until the minimum employment period is completed.
"The contract probation period is what counts." The statutory minimum employment period is what counts.
"We do not need a reason during probation." General protections and discrimination claims have no qualifying period.
"Extending probation extends our protection." It does not. The statutory period stays the same.
"Casuals sit outside all of this." Regular and systematic casual service can count toward the minimum employment period.
Claims that apply from day one
General protections. If the reason for dismissal is a prohibited one, such as the employee taking leave, making a complaint or exercising another workplace right, they can claim from day one. There is no income cap, and the burden is on you to prove the real reason.
Discrimination. Federal and state anti-discrimination laws apply from the first day of employment.
Breach of contract. Failing to give the notice or entitlements the contract promises.
Work health and safety. Dismissing someone for raising a safety concern or refusing unsafe work.
Take a new employee who raises a safety concern in week two. In week five, you decide they are not the right fit. The two events may be unrelated. But the employee only has to allege a connection, and the burden then falls on you to show the reason was something else. A legitimate decision with no records looks the same as an unlawful one.
Where businesses lose the argument
Most probation exits are justified. The business loses because it cannot prove it. There is no written standard, no midpoint conversation and no record of concerns. When the decision is challenged, the employee has a timeline and the business has an opinion.
The other common failure is the missed date. The statutory period passes unnoticed, and the business needs a full performance process for someone it never intended to keep.
How to protect your position
Put the standards in writing on day one: what the person must demonstrate, by when, and how you will assess it. It takes a page, not a policy.
Diarise a midpoint review and a decision date well before the minimum employment period ends.
Hold the midpoint review and document it, including where performance falls short. One concern written down in week three is worth more than five raised in an exit meeting.
Before deciding, check for recent workplace-right activity. Has the employee taken leave, made a complaint or asked for flexible work? If so, take advice first.
At the decision point, choose deliberately: confirm, extend (only where the contract allows it and there is a genuine reason) or end the employment. If you are ending it, put your concerns to the employee and let them respond first.
Give notice correctly: the contract, the award or the National Employment Standards, whichever is greater. Probation does not remove the right to notice.
Common questions
Can I extend probation? Only if the contract allows it. Document why, and what has to change, before the original period ends. Extending a period that has already lapsed has no effect.
Do I have to give notice during probation? Yes. The contract can set a shorter notice period for probation, but never below the statutory minimum.
Do I need a reason to end employment during probation? You always have one. Be ready to state it and back it up. If you cannot, you are exposed to the argument that the real reason was something else.
Get the first six months right
Probation is the cheapest point in the employment relationship to fix a problem. It is also where most businesses leave themselves exposed. IndustrialHR Alliance members get written advice and probation review templates before the decision date arrives. To talk through a matter, call Rhiannon on 0481 100 416 or book a consultation.
IndustrialHR does not provide legal advice.
