Probation Period vs Qualifying Period: Why Getting This Wrong Could Cost You

If you’re running a small or medium business, you’ve probably used a probationary period clause in your employment contracts. But don’t confuse that with the Fair Work qualifying (minimum employment) period. They sound similar, yet they serve very different purposes, and mixing them up can be costly.

In plain terms, probation is a contract detail, whereas the qualifying (minimum) period is a statutory requirement under the Fair Work Act 2009. Understanding the difference will help you manage new hires and avoid legal pitfalls. Let’s have a closer look. 

First Things First: What are probation periods vs qualifying periods?

Probationary period (contractual): 

This is a term you include in an employment agreement (for example “3- or 6-month probation”) so you can assess a new employee’s fit with the job. It’s not mandated by law.

During probation, either you or the employee can usually end the job if it’s not working out, with minimal fuss – though you still generally have to give any agreed notice or pay in lieu. Think of probation as a “trial run” period you negotiated in the contract.

Qualifying (minimum employment) period (statutory): 

This is a legal threshold in the Fair Work Act. An employee must have worked a certain minimum time before they can legally lodge an unfair dismissal claim. For most businesses, this is 6 months. For small businesses (fewer than 15 employees), it’s 12 months.

This requirement exists whether or not the contract mentions probation. In other words, even if you haven’t set any probation clause, the law still says “no unfair dismissal claims” until 6 or 12 months are up.

Put simply:

Probation = employer’s choice (in the contract).

Qualifying Period = the law’s requirement. 

They run in parallel and do not cancel each other out.

A probation clause can’t override the Fair Work Act. For example, if you have a 3‑month probation but the employee is dismissed after 5 months, they still won’t qualify for unfair dismissal because the Act’s 6-month (or 12-month) rule takes precedence.

Common Mix-Ups and Misconceptions:

• “During probation, I can fire them and I don’t need to follow any process.” 

Even if someone is on probation, they still have employment rights. You must give any notice or pay in lieu as per the contract or National Employment Standards (NES).

Very importantly, dismissing someone before the minimum period ends doesn’t block other claims. For example, an employee could still make a general protections or discrimination claim if they believe the real reason for dismissal was unlawful.

So use probation to assess performance, but always act fairly and document any issues.

• “After probation ends, an employee immediately has unfair dismissal rights.”

Rights arise only after the qualifying period. Passing probation (say 3 or 6 months) doesn’t by itself grant unfair dismissal protection. It’s hitting the 6 or 12 months qualifying period (depending on your business size) that matters.

Before that, the employee can’t claim unfair dismissal at the Commission, though they do keep general protections and leave entitlements.

• “I can just set probation longer than 12 months and we'll be covered.” 

You might be tempted to put a 12‑month (or even longer) probation in the contract, thinking it protects you. The Fair Work Act forbids any benefit from a probation beyond the 6 or 12 month statutory cap.

In fact, if you try to make probation longer than the legal qualifying period, it simply won’t make any difference – the employee will still get unfair dismissal rights once they hit the 6 or 12 months mark.

• “We can extend probation as needed and fire someone just before they finish the qualifying period.”

You can extend probation up to the qualifying period if both sides agree, but extending beyond that is useless.

Also, terminating someone just before they finish qualifying to “beat the clock” can be seen as dodging their rights and can backfire legally.

Example scenarios:

Large employer, short probation. 

You hire with a 3‑month probation. At month 5, you decide to let the employee go. They’re still under the 6‑month qualifying mark, so they can’t lodge an unfair dismissal (though they still get paid entitlements). Had you waited until month 7, then they would qualify and could claim unfair dismissal if there wasn’t a valid reason.

Small business, 6‑month probation. 

You give a 6‑month probationary period. You dismiss at month 9. The employee hasn’t hit the 12 month qualifying period for small business, so unfair dismissal doesn’t apply yet.

However, the timing is tricky: simply firing them too close to 12 months without any evidence of poor performance can be seen as dodging their rights.

So What Should You Do?  

1. Get your contracts and terms clear. 

   Put a probation clause in writing (for example “3‑month probation”). Specify how much notice applies during probation. Crucially, make the probation period shorter than the qualifying period. For example, 3 or 6 months is common. That way, you get time to assess performance before the minimum period elapses.

   
   

2. Explain expectations and review regularly. 

   From day 1, set clear performance goals and provide feedback. Schedule check-in meetings before probation ends, at least once or twice. Document each discussion: praise successes and note any issues. If there are warning signs (lateness, attitude, skill gaps), address them early.

   A proactive approach means that if you eventually let someone go, you can show you gave them fair warning and support. This not only helps underperformers to improve, but also strengthens your position if the dismissal is questioned.

   
   

3. Follow fair process even on probation. 

   Even though unfair dismissal laws don’t apply before the qualifying period, it’s best practice to act reasonably. If you’re going to dismiss someone within the probation/qualifying period, still provide a meeting to explain the reason, give a written letter, and pay any accrued leave.

   Employers should always give notice or payment in lieu and pay out accrued annual leave when terminating, regardless of probation.

   
   

4. Watch the clock on dismissals. 

   If you do plan a dismissal, pay close attention to timing. Remember, a dismissal is generally effective only when you actually communicate it to the employee.

   For example, if you send a termination letter by post, ensure it arrives before any qualifying deadline.

   Small businesses have an extra layer: if you follow the Small Business Fair Dismissal Code (for example, issue warnings and follow notice rules), the Commission will automatically deem the dismissal fair. So if you’re under 15 staff, follow that Code checklist.

If In Doubt, Get Advice

Managing dismissals and navigating the probation period vs qualifying period can be confusing. But getting it right from the start will save you headaches (and potential claims) later.

Review your employment contracts and performance processes sooner rather than later.

I work with small and medium businesses to make HR easier, safer, and less stressful. 

If you need help setting up compliant contracts, conducting effective check-ins, or handling a sensitive dismissal, book a free discovery call today and let’s make managing staff the least of your worries.

Get in Touch

Need help? Contact us today - sandra@hrconsultingtas.com.au or 0408 408 225  

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