Probationary Periods - Are You Using Them Effectively?

Probationary periods are one of those workplace mechanisms that many employers use without truly understanding their purpose, or their legal limitations.

They seem simple on the surface: a set timeframe to trial a new hire. But scratch beneath that and you’ll find a surprising amount of confusion, especially when it comes to how these periods interact with Australia's employment laws.

Whether you’re onboarding a new team member or reviewing your hiring process, it’s time to unpack what probationary periods really mean—and how to use them effectively.

What Is a Probationary Period, Really?

Most employers view probation as a built-in trial, but that’s not quite accurate. Legally, there’s no such thing as a probationary period in the Fair Work Act or modern awards. There’s no mandatory timeframe. In fact, the term “probationary period” only has weight if it’s specifically outlined in an employment contract.

Essentially, it’s a contractual clause, not a legal safety net. It allows both the employer and the employee to assess fit and suitability in the early stages of the working relationship. If it's not spelled out in the employment contract, it technically doesn't exist.

Typically, it permits either party to end the employment relationship with short notice, usually a week. But, and this is crucial, the way it’s worded matters. You’ll need carefully considered language to ensure you're covered.

Probation vs Minimum Employment Period: Know the Difference

Here’s where many get tripped up: confusing the probationary period with what’s legally known as the minimum employment period. This is the real line in the sand when it comes to unfair dismissal claims.

Under the Fair Work Act:

• If your business employs fewer than 15 people, the minimum employment period is 12 months.
• For businesses with 15 or more employees, it's 6 months.

During this period, employees cannot bring an unfair dismissal claim. But that doesn’t mean they can’t try, claims can still be lodged, and it’s up to the employer to prove the employee wasn’t eligible.

It’s a time-saving and cost-saving defence, but not a foolproof shield.

This is likely why many employment contracts list a six-month probation, it mirrors the legal minimum for unfair dismissal protection in larger businesses.

What’s the Purpose of a Probationary Period?

Think of the probationary period as a mutual evaluation window. For employers, it’s a chance to see whether a new hire fits the role, meets expectations, and aligns with team culture. For employees, it’s time to assess whether the job, environment, and leadership meet their own standards and career goals.

During this time, termination is generally simpler, notice periods are shorter, and the relationship can end with fewer complications, provided your contract allows for it.

But - and this is key - you must still tread carefully.

Any termination must not breach protections around discrimination, adverse action, or general protections. You can’t terminate someone during probation for reasons like pregnancy or exercising a workplace right.

Common Mistakes Employers Make

1. Failing to Assess Properly

One of the biggest mistakes is simply not paying enough attention during the probation. Too often, employers allow the period to pass without regular check-ins or performance evaluations. Then, suddenly, they realise the new hire isn’t a good fit, after it’s too late to exit easily.

If someone “passes” probation without scrutiny, it becomes much harder to address performance issues later.

2. Extending Without Reason

Another myth: that probation can be extended as needed. Unless your contract specifically allows for extensions, and even then, only within the minimum employment period - it’s not legally viable. And if you’re already beyond six or twelve months, depending on your headcount, the probation label becomes meaningless anyway.

3. Thinking It’s a Legal Safety Net

Probation doesn’t automatically offer protection. It’s not a free pass to terminate employment without consequences. Only the minimum employment period provides some legal buffer around unfair dismissal, and even that has limits.

4. Delaying Action

Too many employers wait until the final days of probation to make a decision - or worse, they delay action until after the period ends. If there are signs things aren’t working, address them early. Use performance discussions and written documentation to support your decisions.

Set Up for Success

If you're going to use probationary periods (and you should, when done right), make them count:

• Include a clear probation clause in the contract.
• Use onboarding and training to support the new hire.
• Set performance expectations early and follow up regularly.
• Have structured check-ins and reviews during the probation.
• Act decisively if it’s not working out, don’t drag it on.

Ultimately, probation is an employer’s opportunity to make informed decisions, not a procedural checkbox. When used intentionally, it protects your business, improves retention, and ensures you’re building a team that’s aligned with your goals.

An Invitation
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