Employers often ask what a probation period in Australia actually allows them to do — but the legal position is frequently misunderstood. Probation is one of the most misunderstood terms in Australian employment law. It’s commonly described as a period during which an employer can “easily” let an employee go — but probation isn’t a statutory concept, it doesn’t override notice obligations, and it doesn’t insulate the employer from general protections claims or discrimination claims. The relevant statutory protection is the Minimum Employment Period under section 383 of the Fair Work Act — the threshold for probation vs unfair dismissal in Australia — which is separate from the contractual probation in the offer letter. Here’s how the two actually work, and what hospitality operators can and can’t do during the early months of employment.
Probation is contractual; the Minimum Employment Period is statutory. The MEP under FW Act s383 is 6 months for non-small business employers and 12 months for small business employers (fewer than 15 employees). Within the MEP, the employee cannot bring an unfair dismissal claim. They can still bring a general protections claim, a discrimination claim, or a Fair Work claim about workplace rights. Notice of termination under s117 still applies during probation. Contractual probation duration is not capped, but it cannot extend or reduce the MEP.
In Simple TermsYou can dismiss a new hire more easily in their first 6 months (or 12 months for small businesses with fewer than 15 employees) because they can’t bring an unfair dismissal claim — but you still have to give them notice, you can’t dismiss for a discriminatory or unlawful reason, and the “probation” in the contract isn’t doing the legal work people think it is.
There is no legal probation period under Australian law. Probation periods in Australia are contractual only. The legal protection threshold is the Minimum Employment Period under section 383 of the Fair Work Act 2009 (Cth), which determines when an employee can bring an unfair dismissal claim under section 385.
This single distinction explains most of the confusion around probation. The contract sets a probation period to define a contractual review milestone. The Fair Work Act sets a separate Minimum Employment Period to determine access to unfair dismissal jurisdiction. The two often coincide in length, but they are different concepts with different effects.
This is the foundational distinction:
| Aspect | Probation Period | Minimum Employment Period (MEP) |
|---|---|---|
| Source | Employment contract | Fair Work Act 2009 (Cth) s383 |
| Duration | Whatever the contract says (typically 3-6 months) | 6 months (non-small business) / 12 months (small business) |
| Purpose | Contractual review of suitability | Threshold for unfair dismissal jurisdiction |
| Effect on unfair dismissal | None directly | Employee cannot claim unfair dismissal until MEP completed |
| Effect on notice obligations | None — s117 still applies | None — s117 still applies |
| Effect on general protections | None — Part 3-1 applies day one | None — Part 3-1 applies day one |
| Effect on discrimination law | None — protections apply day one | None — protections apply day one |
The reason this matters: hospitality operators frequently state things like “they’re still on probation, so we don’t need to give a reason.” The contractual probation does not legally enable that — the MEP does, and only for unfair dismissal jurisdiction. Other claims remain available to the dismissed employee from day one of employment.
Under section 383 of the Fair Work Act, the Minimum Employment Period is:
An employee cannot bring an unfair dismissal application under section 385 unless they have completed the MEP. This is the principal practical effect of the “probation period” in common parlance — but it is not actually probation, and it is not in the contract.
What counts as service for the MEP under section 384:
What does not count: a casual employee’s service typically does not count toward the MEP unless their casual employment was on a regular and systematic basis with a reasonable expectation of continuing employment under section 384(2)(a).
For most hospitality operators, the small business threshold determines whether the MEP is 6 or 12 months — and whether the Small Business Fair Dismissal Code under section 388 applies.
Under section 23(1) of the Fair Work Act, a small business employer at a particular time is one who employs fewer than 15 employees at that time. Counting:
The “associated entities” provision is significant for hospitality groups operating multiple venues under the same corporate structure — a 12-employee restaurant whose holding company also owns a 10-employee bar will be treated as a 22-employee non-small business, not as two separate small businesses.
Within the Minimum Employment Period, the employer has practical flexibility that doesn’t exist after the MEP is completed:
The employee cannot bring an unfair dismissal claim under section 385 to the Fair Work Commission until they have completed the MEP. This is the meaningful practical benefit. The employer can make a decision based on suitability, fit, performance, conduct, or operational requirements without the procedural fairness burdens that apply post-MEP.
If the contract specifies probation review meetings, performance targets, or formal sign-off at the end of the probation period, the employer can apply those processes. Failure to formally complete the contractual probation does not extend the MEP — it is a contractual matter only.
If the contract is structured so that employment continues at the conclusion of probation unless ended by the employer, a decision not to confirm employment will typically constitute a termination of employment — not a clean walk-away. This means the employer must comply with notice obligations under section 117 of the Fair Work Act and the applicable Award (clause 35 of MA000119 or clause 41 of MA000009), pay out accrued leave under section 90, and take care that the reason for non-confirmation does not breach general protections or discrimination law. The contractual probation framework can structure the timing of the decision, but it does not remove the underlying termination obligations.
Section 117 of the Fair Work Act and clause 35 of MA000119 (clause 41 of MA000009) require notice of termination regardless of probation status. The minimum notice period for an employee with up to 1 year of service is 1 week. The employer can pay in lieu of notice. There is no “probation exception” to the notice obligation under either the Fair Work Act or the modern awards.
The exception is summary dismissal for serious misconduct — under regulation 1.07 of the Fair Work Regulations, an employer may dismiss without notice for serious misconduct. This applies regardless of whether the employee is on probation; it is not a probation-specific power.
The general protections under Part 3-1 of the Fair Work Act apply from day one of employment. The MEP does not affect general protections jurisdiction. An employee dismissed during probation can bring a general protections application under section 365 if the dismissal was because the employee:
General protections claims have a 21-day filing limit from the dismissal under section 366. The maximum penalty for a general protections contravention is significant, and successful applicants can receive compensation for lost income, hurt and humiliation.
Federal, State, and Territory anti-discrimination laws apply from day one of employment. A dismissal during probation that is based on a protected attribute exposes the employer to claims under the Sex Discrimination Act 1984 (Cth), Disability Discrimination Act 1992 (Cth), Age Discrimination Act 2004 (Cth), Racial Discrimination Act 1975 (Cth), and the corresponding State and Territory Acts. Probation does not create a discrimination exemption.
All NES entitlements apply during probation. The employee accrues annual leave, personal/carer’s leave, and superannuation contributions from day one. The employer must pay correct Award rates and any applicable allowances. Probation does not create an authorised deduction from wages under section 324.
An employer cannot represent to an individual that an employment relationship is an independent contractor relationship in order to avoid Award obligations or probation/notice protections. Section 357 of the Fair Work Act prohibits sham contracting, with civil penalties applicable. The hospitality industry has been a focus of Fair Work Ombudsman sham contracting investigations — particularly arrangements where casual employees are reclassified as “contractors” during their first weeks.
There is no statutory cap on contractual probation duration in Australia, although the period must still be reasonable in the context of the role and the contract. Excessively long probation periods (e.g. 18+ months) can raise contract law issues including unconscionability arguments and may attract scrutiny under general protections jurisdiction if used to avoid statutory protections. Two factors should influence the contract drafting:
For non-small business employers, a 6-month probation period aligns with the 6-month MEP. For small business employers, a 12-month probation period aligns with the 12-month MEP. Mismatched periods cause confusion — a 3-month probation in a small business contract creates an awkward period (months 4-12) where the contract treats the employee as confirmed but the MEP still applies.
Senior or complex roles (head chef, restaurant manager, group operations manager) often warrant the full 6-month or 12-month probation. Junior or operational roles may legitimately have shorter probation (3 months) where suitability can be assessed quickly. The probation period sets the contractual review milestone, not the legal protection threshold.
The contract may permit extension of the probation period (typically by up to a further 3 months) where the employer is not yet satisfied with the employee’s performance. Extension must be in writing, must occur before the original probation expires, and must be communicated to the employee. An extension that pushes past the MEP doesn’t change the MEP — it still extends only the contractual review period.
While the formal procedural fairness requirements of unfair dismissal jurisdiction do not apply until the MEP is completed, following a basic fairness process during probation remains important for risk management. Two practical reasons:
A minimal probation-period fairness process:
If a casual employee converts to permanent employment under the casual conversion rules, prior casual service may count toward the MEP where the casual employment was on a regular and systematic basis with a reasonable expectation of continuing employment (s384(2)(a) of the Fair Work Act). A casual who has worked regularly for 8 months on a regular and systematic basis and converts to permanent does not necessarily start the MEP clock fresh — depending on the s384(2) test being met, they may already have completed the MEP at the time of conversion.
Some employers apply a fresh probation period to internal promotions (e.g. promoting a sous chef to head chef). The MEP doesn’t restart — service continues. The probation in the new role is a contractual review period only. If the promoted employee is not suited to the new role, the question is whether they can return to their previous role rather than face dismissal.
A “trial shift” performed by a candidate before a formal employment contract is offered is itself an employment relationship if the candidate performs productive work under direction. The Fair Work Ombudsman’s position is that trial work generally must be paid at Award rates, with very limited unpaid demonstration permitted (typically a brief skills demonstration of 30-60 minutes). Unpaid trial periods of multiple shifts, weekend services, or full days are generally unlawful and can attract civil penalties.
The procedural mechanics of probation termination, notice requirements, and final pay.
When written warnings are required (post-MEP) and the procedural fairness framework.
The s524 stand-down framework vs termination decisions during the early employment period.
How casual service counts toward the Minimum Employment Period after conversion.
Probation isn’t the legal shield people think it is. Get the contract right, follow notice rules, document the process — and the early months of employment work as intended.
Fitz HR knows the difference between contractual probation and the statutory MEP, the notice rules under s117, and the general protections risks. Get a clear answer before making the call.
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