Probation is one of those workplace concepts that sounds simpler than it is.

In both Australia and New Zealand, there is a widespread belief (among employers and employees alike) that:

• Being on probation means you have fewer rights
• Dismissal during this period is a relatively clean exercise
• The whole arrangement sits comfortably outside the reach of employment law.

On all three counts, this is wrong.

The legal frameworks governing probation periods in Australia and New Zealand are nuanced, jurisdiction-specific, and – importantly – not interchangeable.

A process that is perfectly lawful in Sydney can expose an Auckland employer to a personal grievance claim. What constitutes a fair dismissal in Wellington may not pass scrutiny under the Fair Work Act in Melbourne.

This guide breaks it all down – the legal frameworks, the employee rights that apply from day one, the critical distinction between trial periods and probation periods in New Zealand, the protections that persist regardless of probation status, and the practical tools you need to manage these periods compliantly.

There are also ready-to-use templates at the end, because knowing the law only gets you halfway there. ⬇️

Probation Periods in Australia: The Legal Framework

Let's start with a misconception that costs Australian employers significant financial and reputational damage every year: probation is not a legal concept under the Fair Work Act 2009. The Act does not use the word. What it does use is the Minimum Employment Period (MEP).

The MEP is the threshold that determines whether an employee can bring an unfair dismissal claim. It sits at:

• 6 months for employees working for businesses with 15 or more employees
• 12 months for employees working for small business employers (fewer than 15 employees)

Probation is a contractual concept – a clause you write into an employment agreement. The Minimum Employment Period is a statutory concept, a threshold that exists regardless of what the contract says.

What the Fair Work Act actually governs

The Fair Work Act 2009 is administered by the Fair Work Commission (FWC) and the Fair Work Ombudsman (FWO). It applies to the vast majority of private sector employees across Australia, including:

• All employees in Victoria, the Northern Territory, and the ACT
• Private sector employees in NSW, Queensland, South Australia, and Tasmania
• Employees of constitutional corporations in Western Australia (most Pty Ltd companies)
• Commonwealth employees and employees of Commonwealth authorities

Some state and territory public sector employees fall outside the national system and are covered by state-specific legislation instead.

➡️ In NSW, for example, local government employees are covered by the Industrial Relations Act 1996 (NSW) – which has its own interpretation of what constitutes a reasonable probationary period, as clarified in Shrestha v City of Ryde Council [2024] NSWIRComm 1005.

Employee entitlements during probation: what cannot be taken away

Here is what probationary employees in Australia are entitled to from the moment they start work, and none of this can be contracted away:

• Fair wages and on-time payment, in accordance with any applicable Modern Award or Enterprise Agreement
• Accrual of paid annual leave (full-time and part-time employees)
• Accrual of personal/carer's leave and compassionate leave
• Unpaid carer's leave and compassionate leave (casual employees)
• A safe and healthy workplace – Work Health and Safety obligations apply from day one
• Protection from workplace bullying and harassment
• Receipt of the Fair Work Information Statement (and Casual Employment Information Statement where applicable)

The one area where probationary employees tend to have reduced entitlements is redundancy pay. Under the National Employment Standards (NES), redundancy pay generally does not apply until an employee has 12 months of continuous service. Discretionary benefits such as bonuses may also be subject to separate contract terms.

General Protections: the protections that apply from day one, full stop

Even where the MEP has not been reached and an unfair dismissal claim is not yet available, Part 3-1 of the Fair Work Act (the General Protections provisions) apply from the first moment of employment.

Under the General Protections framework, it is unlawful for an employer to take adverse action (including dismissal) against an employee because they:

• Exercised a workplace right: this includes querying their pay, making a complaint about working conditions, taking sick leave, or raising a workplace safety concern
• Were involved in making a complaint or inquiry about their employment
• Are a member (or not a member) of a union
• Are pregnant, have a disability, or belong to another protected category
• Made (or propose to make) a workers' compensation claim

The 13 protected attributes under the Fair Work Act include race, sex, age, disability, pregnancy, religion, national extraction, social origin, sexual orientation, and family responsibilities. A dismissal motivated (even partially) by any of these attributes can give rise to a General Protections claim, regardless of whether the employee is on probation or not.

Termination during probation: what employers must still do

The practical reality of dismissal during probation in Australia is this: if an employee has not yet reached the MEP, an unfair dismissal claim is generally not available to them. However, this does not make dismissal consequence-free. The employer must:

• Provide proper notice (or payment in lieu). Under the NES, employees with less than one year of service are entitled to at least one week's notice. Check whether any applicable Modern Award or Enterprise Agreement sets a higher standard, whichever is greater applies.
• Not dismiss for a prohibited reason (see General Protections above)
• Not dismiss due to temporary absence caused by illness or injury
• Comply with anti-discrimination law at both federal and state/territory level

Best practice (and the most effective risk management strategy) is to document performance concerns, provide clear and specific feedback, and give the employee a genuine opportunity to respond before making a dismissal decision.

Even when an unfair dismissal claim is not available, a poorly documented dismissal can still generate a General Protections claim, and those carry no statutory compensation cap.

Extending a probation period

A probation period can be extended only where the employment contract expressly permits it and specifies the maximum duration of any extension. Any extension must be communicated in writing and agreed upon with the employee. Silence is not agreement.

The major risk of extending probation past the MEP threshold: once the employee has served 6 months (or 12 months with a small business employer) and is then dismissed, they can bring an unfair dismissal claim. The probation label in the contract becomes irrelevant at that point.

Small business employers: the different rules

If your business has fewer than 15 employees at the time of dismissal (this includes regular and systematic casual employees of associated entities), you qualify as a small business employer under the Fair Work Act. This means:

• The MEP threshold extends to 12 months rather than 6
• Once an employee passes the 12-month mark, the Small Business Fair Dismissal Code applies
• General Protections still apply from day one, this is non-negotiable regardless of business size

Probation periods in New Zealand: a different framework

New Zealand's approach to probation diverges from Australia's in ways that are easy to miss if you are applying Australian frameworks to a Kiwi context. The most important difference is a legal distinction that Australia simply does not have: the separation between a probation period and a trial period.

Employment law in New Zealand is primarily governed by the Employment Relations Act 2000 (ERA 2000), administered through the Employment Relations Authority and the Employment Court. The ERA places good faith at the centre of all employment relationships, as a substantive legal obligation.

Probation periods vs trial periods

This is the piece of New Zealand employment law that trips up employers most frequently, particularly those who are familiar with the Australian system. These two terms are not interchangeable. They carry materially different legal implications.

The good faith obligation

Good faith is a substantive legal requirement embedded throughout the ERA 2000 and it applies during probation from the very first day. Under the Act, both parties must:

• Be active and constructive in maintaining a productive employment relationship
• Be responsive and communicative
• Not mislead or deceive each other
• Proactively share information that is, or is likely to be, relevant to the employment relationship

➡️ This means that good faith governs how you structure a probation period, how you communicate concerns, and how you conduct any dismissal process. A probation clause in a contract does not override good faith, it operates within it.

It is also worth noting: you cannot force an employee onto a probation period. If an employment agreement contains a probation clause that the employee did not knowingly agree to, that clause can be deemed invalid. The employment continues, but the probation period does not.

Employee entitlements during probation in New Zealand

Probationary employees in New Zealand have the same minimum legal entitlements as permanent employees. These include:

• Payment at the agreed rate, not a penny less than the contractual wage
• The same working conditions and hours as those stated in the employment agreement
• Annual leave entitlements under the Holidays Act 2003 (accrued from the first day, accessible after 12 months)
• Sick leave (from 6 months of employment under the Holidays Act 2003)
• Bereavement leave, parental leave, and domestic violence leave
• All 11 public holidays, and an alternative paid day off if they are required to work on one
• A safe workplace under the Health and Safety at Work Act 2015
• Protection from discrimination under the Human Rights Act 1993

One important note on annual leave: although leave accrues from day one, most probationary employees will not yet have access to annual leave because it becomes available after 12 months of continuous employment. During a 3-6 month probation period, sick leave also has not yet kicked in – it becomes available after 6 months of employment.

Dismissal during a probation period in New Zealand

In New Zealand, dismissing an employee during a probation period requires a full fair process. There is no statutory 'free window' equivalent to the Australian Minimum Employment Period.

The probation period gives employers some operational flexibility (it allows for a somewhat streamlined process) but it does not remove the requirement for procedural fairness.

Before dismissing an employee on a probation period, the employer must:

Here's that section in full:

Before dismissing an employee on a probation period, the employer must:

• Raise specific concerns in writing. The employee must know precisely what the issue is and have the opportunity to respond.
• Provide a genuine opportunity to respond. The employer must genuinely consider the employee's response before making a decision.
• Offer support and training where appropriate. Probation is partly an assessment tool, but it is also an onboarding phase. Employers who dismiss without providing adequate support risk a personal grievance claim.
• Give proper notice. The notice period specified in the employment agreement applies. If no notice period is stated, reasonable notice is required.
• Provide written confirmation of dismissal, including the reasons.

Employees on a probation period can raise a personal grievance for unjustified dismissal if they believe the process was not followed.

This is categorically different from a trial period, where this right is removed. If you dismiss an employee on a probation period without following fair process, you are exposed to an ERA claim that can include compensation for humiliation, loss of dignity, and injury to feelings – as well as lost wages.

Trial period dismissals: the (shorter) process that still applies

Even on a 90-day trial period (where the unjustified dismissal personal grievance is not available) the employer cannot simply hand someone their notice without any process at all. The employee must be:

• Informed that they are being dismissed (before the trial period ends)
• Given the notice period required in their employment agreement
• Provided with reasons for the decision, if they ask

Employees on a trial period can still raise personal grievances on other grounds, including discrimination, sexual harassment, racial harassment, and duress. A trial period protects only against the specific claim of unjustified dismissal, nothing else.

A common and costly mistake: the trial period clause must be signed and in place before the employee starts work. If it was added to the agreement after day one even by one day) it is invalid, and the employee defaults to full probationary period rights, including the right to claim unjustified dismissal.

Personal grievances: what they cover and the 90-day window

In New Zealand, an employee has 90 days from the act or omission giving rise to the grievance to raise it with their employer.

This does not mean lodging a claim with the Employment Relations Authority, it means raising it informally with the employer. Grievances that are not raised within 90 days may be declined by the ERA, except in exceptional circumstances.

Personal grievances can be raised on the following grounds (all of which remain available during probation and trial periods):

• Unjustified dismissal (probation period only, not during a valid trial period)
• Unjustifiable disadvantage – where employment conditions are worsened without justification
• Discrimination on any of the grounds protected under the Human Rights Act 1993
• Sexual harassment
• Racial harassment
• Duress relating to union membership or activity

Australia vs New Zealand: the Differences for HR

If you are an HR manager operating across both countries, or transitioning between them, these are the critical distinctions to keep front of mind:

The five probation mistakes HR managers make in both countries

1. Treating 'probation' as a blank cheque for dismissal

In Australia, dismissal during the MEP without a prohibited reason is technically low-risk from an unfair dismissal standpoint. But it is never consequence-free.

General Protections claims have no compensation cap. In New Zealand, probation-period dismissals always require a fair process, the only tool that removes the unjustified dismissal right is a valid trial period.

2. Failing to put the probation clause in writing before day one

In New Zealand, any trial period that is not in the written employment agreement before the employee starts work is invalid.

In Australia, the terms of probation – including duration, extension rights, and notice obligations – must be clearly documented. Verbal agreements, after-the-fact addenda, and assumed terms are all risks.

3. Extending probation past the MEP threshold (Australia)

Once an employee in Australia has served the Minimum Employment Period, they can bring an unfair dismissal claim regardless of whether their contract still describes them as 'on probation'. Extending probation is not a way to delay legal exposure, it often creates more of it.

4. Skipping the feedback loop

In both countries, employers who dismiss probationary employees without documented feedback, specific performance concerns, and a genuine opportunity to respond are exposed.

In New Zealand, this is a direct route to a personal grievance.

In Australia, a poorly documented dismissal can turn a performance-based termination into a General Protections claim if the employee has recently exercised any workplace right.

5. Applying one country's rules to the other

This is the big one for trans-Tasman HR teams.

New Zealand's trial period has no equivalent in Australia. Australia's Minimum Employment Period has no equivalent in New Zealand. The good faith obligation in New Zealand is more explicit and more rigorously enforced than its Australian counterpart.

These systems require separate processes, separate documentation, and separate legal knowledge.

HR Templates for Probation: Ready to Use

Template 1: Probation clause for Australian employment contracts

Template 2: 90-day trial period clause for New Zealand employment contracts

Template 3: Probation check-in record (for both countries)

Template 4: End of probation confirmation letter

The Cost of Getting Probation Wrong

Probation is a legitimate and genuinely useful HR tool. Used well, it gives both parties clarity, structure, and a shared framework for what success looks like in those critical first months. Used carelessly – applied as a blank cheque for dismissal, treated as a documentation-free zone, or confused across jurisdictions – it becomes a significant liability

The law in both Australia and New Zealand is clear: probationary employees have rights. Not fewer rights than permanent employees – the same rights, with a narrower range of mechanisms available to enforce them.

Understand the framework, document your process, give genuine feedback, and treat probation as the two-way assessment it was designed to be. 👏

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