Can I Dismiss Someone During Probation? An Australian SME Employer’s Guide

Short answer: Yes — but “probation” is not a legal shield. In Australia, an employee on probation can be dismissed, but they are still entitled to notice (or payment in lieu), any outstanding entitlements, and protection from dismissal for an unlawful reason. Whether they can also bring an unfair dismissal claim depends on how long they’ve worked for you and how many employees your business has — not on whether they’re “still on probation.” Get the process wrong and a probationary dismissal can still land you in front of the Fair Work Commission (FWC).

This guide walks Australian small and medium business owners through what the law actually says, what it doesn’t say, and how to end a probationary employment relationship correctly.

What “Probation” Actually Means Under Australian Law

Here’s something that surprises a lot of business owners: the Fair Work Act 2009 doesn’t use the word “probation” at all [2]. It’s a contractual term, not a legislated one. Employers use probationary periods — commonly three to six months — as a trial phase to assess whether a new employee is suitable for the role.

Legally, what matters isn’t the label “probation” in someone’s contract. What matters is the minimum employment period set out in the Fair Work Act, because that’s what determines whether an employee can access unfair dismissal protections at all.

Employees on probation keep almost all the same rights as everyone else

The Fair Work Ombudsman confirms that employees on probation continue to receive the same entitlements as any other employee, including everything set out in the National Employment Standards (NES) [2]. Full-time and part-time probationary employees still accrue and can access paid leave, such as annual leave and personal/carer’s leave, throughout their probation period.

So being on probation does not mean:

• No notice period applies
• Leave stops accruing
• The employee loses protection from discrimination or unlawful dismissal
• You can dismiss without a valid reason, no questions asked

The Real Trigger: The Minimum Employment Period

Under the Fair Work Act, an employee can only apply for unfair dismissal once they’ve completed the minimum employment period. The Fair Work Ombudsman sets this out clearly: to be eligible for an unfair dismissal claim, an employee must have worked for the employer for at least six months, or 12 months if the employer is a small business [3]. A small business employer is one with fewer than 15 employees at a particular time [3], counted as a straightforward headcount of everyone employed on a regular and systematic basis [4] — including regular casuals and employees of any associated entities.

This is why probation and unfair dismissal risk often don’t line up. If your standard probation period is three months but your business has 15 or more employees, an employee can technically still lodge an unfair dismissal claim once they hit six months — even after you’ve confirmed them as permanent. Conversely, a small business with a six-month probation period won’t need to worry about unfair dismissal access at the end of probation, because the employee is still five months short of the 12-month threshold.

For this reason, many Australian employment advisers treat “probation” as primarily a performance and cultural-fit review tool, and treat the minimum employment period as the real marker of unfair dismissal exposure.

So, Can You Dismiss Someone During Probation?

Yes. During the minimum employment period, you generally have more flexibility to end the employment relationship without it triggering an unfair dismissal claim — provided the dismissal isn’t for a prohibited reason (more on that below). You must still:

1. Give the correct notice period (or pay in lieu). The Fair Work Ombudsman is explicit that employees are entitled to a notice period even if their employment ends during probation, and must either work out that notice or be paid out in full based on their length of service [1].
2. Pay out all accrued entitlements, including unused annual leave.
3. Avoid dismissing for an unlawful reason — discrimination or retaliation for exercising a workplace right — which applies regardless of length of service.
4. Follow your own employment contract and any applicable modern award, which may set requirements beyond the legal minimum.

Notice periods under the National Employment Standards

The minimum notice period an employer must give is based on the employee’s length of continuous service, as set out in the NES:

Employees aged over 45 who have completed at least two years of continuous service are entitled to an extra week’s notice on top of the above [1]. Most probationary employees will fall into the “1 year or less” bracket, meaning one week’s notice or payment in lieu is the legal minimum — but always check whether the applicable modern award or the employment contract specifies something longer, since either can lift the minimum above the NES default.

Casual employees aren’t entitled to written notice of termination, though it’s still best practice to communicate the outcome clearly and in writing.

Serious misconduct — such as theft, fraud, violence or a serious breach of safety procedures — can justify dismissal without notice. The bar for what counts as serious misconduct is high, so be confident you can substantiate it before relying on this exception.

Protections That Apply Even During the Minimum Employment Period

This is the part employers most often get wrong: the minimum employment period only limits access to unfair dismissal claims. It does not remove other legal protections. Two apply from day one of employment, regardless of probation status or length of service.

1. General protections (adverse action)

The Fair Work Act’s general protections provisions make it unlawful to take “adverse action” — including dismissal — against an employee for a prohibited reason. Prohibited reasons include exercising a workplace right (such as making a complaint, requesting flexible work, or taking personal leave), engaging in lawful industrial activity, or a protected attribute such as sex, age, disability, pregnancy or family responsibilities [12]. General protections claims sit outside the unfair dismissal framework entirely, so they aren’t subject to the same minimum employment period or income-threshold eligibility rules that apply to unfair dismissal [3].

In practice: you can dismiss a probationary employee for genuine performance or conduct reasons, but if the real reason is that they raised a safety concern or queried their pay, the length of their employment won’t shield you from a claim.

2. Unlawful discrimination

Separately, the Fair Work Ombudsman confirms that workplace discrimination protections apply to full-time, part-time and casual employees, probationary employees, apprentices, trainees, and fixed-term or seasonal workers alike [10]. Dismissing someone because of a protected attribute — race, sex, age, disability, pregnancy, family or carer’s responsibilities, religion, and others — is unlawful no matter how long they’ve been employed [11].

The practical takeaway: “They were still on probation” is not, by itself, a defence. What protects your business is a genuine, documented, non-discriminatory reason for the dismissal.

If the Employee Has Reached the Minimum Employment Period

If a probationary employee has already worked long enough to access unfair dismissal protections (12 months for a small business, 6 months otherwise), you need a fair process — not just a valid reason.

For small businesses (fewer than 15 employees): the Small Business Fair Dismissal Code

The Fair Work Commission will generally find a small business dismissal fair if it was carried out consistently with the Small Business Fair Dismissal Code [7]. Under the Code:

• Dismissal without notice or warning is only available where the employer genuinely believes the employee committed serious misconduct — for example theft, fraud, violence, sexual harassment, or a serious breach of safety procedures [7].
• Outside of serious misconduct, the employer must first warn the employee they’re at risk of dismissal, explain the reason (based on conduct or capacity), and give them a genuine opportunity to fix the problem or improve — which may include extra training or clearer expectations [7].

Completing the Fair Work Ombudsman’s Small Business Fair Dismissal Code checklist isn’t compulsory, but keeping a completed copy on file is strong evidence of a fair process if a claim is later lodged.

For larger employers (15+ employees)

The Fair Work Commission weighs a range of factors when deciding whether a dismissal was harsh, unjust or unreasonable — including whether there was a valid reason, whether the employee was told the reason and given a chance to respond, and, for underperformance dismissals, whether the employee had already been warned about their performance [8]. A structured, documented performance process — clear expectations, feedback, and a genuine opportunity to improve — matters more here than the “probation” label itself.

Practical SME Examples

Example 1 — Retail business, 8 employees, 10 weeks into a 3-month probation. A small retailer hires a sales assistant on a standard three-month probation. By week 10, poor punctuality and repeated cash-handling errors have been raised informally but never documented. Because the business has fewer than 15 employees and the employee is well under 12 months’ service, unfair dismissal protection doesn’t apply. The employer still needs to give at least one week’s notice (or pay in lieu), pay out any accrued annual leave, and make sure the real reason for dismissal is the performance issues — not, say, a recent complaint the employee made about being rostered outside their agreed hours, which would engage general protections regardless of service length.

Example 2 — Professional services firm, 22 employees, employee at 5.5 months. A firm with 22 staff (so not a small business) sets a six-month probation period for a new marketing coordinator. At 5.5 months, performance concerns emerge. Because this employer has 15 or more employees, the minimum employment period is only six months — meaning the employee is about to gain unfair dismissal access before probation even ends. If the firm wants to end the employment on performance grounds cleanly, it needs to act — with proper notice and a fair, documented process — well before the six-month mark, rather than assuming “still on probation” buys extra time.

Common Mistakes Employers Make

• Assuming “still on probation” means no notice is owed. It doesn’t — notice (or pay in lieu) is still required unless the dismissal is for genuine serious misconduct.
• Confusing the probation period with the minimum employment period. They’re different concepts and often don’t line up, especially for businesses near the 15-employee threshold.
• Extending probation indefinitely or repeatedly without a genuine reason or written agreement, which can undermine credibility if challenged.
• Not documenting performance concerns during probation, then relying on vague or undocumented reasons at the point of dismissal.
• Overlooking general protections and discrimination risk because the employee is new — these protections apply from day one, not after any qualifying period.
• Dismissing verbally with no written confirmation of the termination date, reason, and final entitlements.
• Getting the headcount wrong when working out whether the business counts as a “small business” for unfair dismissal purposes (regular casuals and associated-entity employees count too).

Employer Checklist: Ending Employment During Probation

Before dismissing a probationary employee, work through this list:

[ ] Confirm the employee’s exact start date and length of continuous service

[ ] Confirm your business’s employee headcount (including regular casuals and associated entities) to determine the minimum employment period

[ ] Identify the genuine reason for dismissal — performance, conduct, or something else?

[ ] Check the reason isn’t connected to a protected attribute, a workplace right the employee has exercised, or any other prohibited general protections ground

[ ] Check the applicable modern award or employment contract for any probation, notice, or process requirements beyond the NES minimum

[ ] Calculate the correct minimum notice period (or payment in lieu) based on length of service

[ ] If the employee has reached the minimum employment period, follow a documented, fair process (warning, reason, opportunity to respond or improve)

[ ] If you’re a small business dismissing an employee who has reached 12 months’ service, work through the Small Business Fair Dismissal Code checklist

[ ] Put the outcome in writing, including the termination date and final entitlements

[ ] Calculate and pay all final entitlements, including accrued but unused annual leave

If you’re not confident on any of these points, that’s exactly the kind of gap a free HR Health Check is designed to catch before it becomes a costly dispute.

Related Reading From the Knowledge Centre

• How Long Should a Probation Period Be for a Small Business?
• Unfair Dismissal vs General Protections: What’s the Difference?
• Writing a Performance Improvement Plan That Actually Holds Up

How HR Excellence Partners Supports SMEs

Probationary dismissals sit right at the intersection of two things Australian SME owners rarely have time to get across: the fine detail of the Fair Work Act, and the day-to-day pressure of running a business without an internal HR team. Getting it wrong doesn’t just risk a Fair Work Commission claim — it costs time, morale, and money you didn’t budget for.

At HR Excellence Partners, we help SME owners get probation and dismissal decisions right the first time — from setting up compliant probation clauses and performance management processes, to reviewing a specific dismissal before it happens, to representing your business if a claim is lodged.

If you’re not sure whether your current probation, notice, or termination processes would hold up under scrutiny, start with a free HR Health Check. We’ll review your current employment contracts, policies, and processes against the Fair Work Act and your relevant award, and flag anything that’s putting your business at risk. Use code HEPFREE at checkout to have the cost of your HR Health Check waived.

Vas Papadopoulos
Founder & Principal HR Consultant
HR Excellence Partners
vas@hrexcellencepartners.com.au
hrexcellencepartners.com.au
+61 432 244 744

References

1. Fair Work Ombudsman, Dismissal — https://www.fairwork.gov.au/ending-employment/dismissal
2. Fair Work Ombudsman, Probation — https://www.fairwork.gov.au/starting-employment/probation
3. Fair Work Ombudsman, Unfair dismissal — https://www.fairwork.gov.au/ending-employment/unfair-dismissal
4. Fair Work Ombudsman, Ending employment fact sheet — https://www.fairwork.gov.au/tools-and-resources/fact-sheets/minimum-workplace-entitlements/ending-employment
5. Fair Work Ombudsman, Notice of termination and redundancy pay fact sheet — https://www.fairwork.gov.au/tools-and-resources/fact-sheets/minimum-workplace-entitlements/notice-of-termination-and-redundancy-pay
6. Fair Work Commission, National Employment Standards — https://www.fwc.gov.au/work-conditions/minimum-wages-and-conditions/national-employment-standards
7. Fair Work Commission, Small Business Fair Dismissal Code — https://fwc.gov.au/about-us/legislation-regulations/small-business-fair-dismissal-code
8. Fair Work Ombudsman, Unfair dismissal (Commission’s factors in assessing harsh, unjust or unreasonable dismissals) — https://www.fairwork.gov.au/ending-employment/unfair-dismissal
9. Fair Work Ombudsman, Protections at work fact sheet — https://www.fairwork.gov.au/tools-and-resources/fact-sheets/rights-and-obligations/protections-at-work
10. Fair Work Ombudsman, Workplace discrimination fact sheet — https://www.fairwork.gov.au/tools-and-resources/fact-sheets/rights-and-obligations/workplace-discrimination
11. Fair Work Ombudsman, Protection from discrimination at work — https://www.fairwork.gov.au/employment-conditions/protections-at-work/protection-from-discrimination-at-work
12. Fair Work Commission, General protections and harmful (adverse) action — https://www.fwc.gov.au/workplace-disputes/general-protections-and-harmful-adverse-action
13. Fair Work Commission, Who the law protects from unfair dismissal — https://www.fwc.gov.au/job-loss-or-dismissal/unfair-dismissal/about-unfair-dismissal/who-law-protects-unfair-dismissal
14. Fair Work Act 2009 (Cth) — https://www.legislation.gov.au/Details/C2024C00549