Employment and Migration Blog

Terminating employment during the probation period

Posted by Lisa Qiu on 30 Nov 2017

Many employers believe that if they terminate an employee during the employee’s probation period, they will be protected from any claim. This is not necessarily correct, for two reasons I have outlined below:

Probation and the “minimum employment period”

For an employee to be able to bring an unfair dismissal claim under the Fair Work Act, they must have worked the “minimum employment period”, which is 12-months for small business employers (those with 14 or fewer employees), or six-months for other employers. Therefore, if employment is terminated after six-months (or 12-months in the case of a small business employer), but still within a longer probation period, they will still be able to bring a claim for unfair dismissal, because they will have been employed for the minimum employment period.

Generally speaking, most employers choose to have a probation period of six-months or less, which means that termination of employment within the probation period will be within the minimum employment period, and will preclude an unfair dismissal claim. Hence the widely held misconception that termination during probation will necessarily prevent an employee from bringing an unfair dismissal claim.

Claims other than unfair dismissal

If an employer terminates employment within six-months of employment (or 12-months for small business employers) does this mean that the employer is safe from all claims? No, because other types of claims, such as adverse action (general protections) or discrimination claims don’t require the employee to have served the minimum employment period.

Therefore, as a matter of best practice, it’s always prudent for an employer to raise performance issues with an employee in a timely manner, and to give them a reasonable opportunity to respond or improve, before making any decision to terminate, and to be clear about the reasons for termination, even during probation. The less blindsided an employee feels about their termination, and the more they understand the basis for their termination, the less likely they will be to bring a claim.

If you need assistance with managing a termination, contact our Employment Law Team: