Minimum Employment Periods

Every employee in Australia must serve what is called a “minimum employment period” before they are entitled to bring a claim for unfair dismissal if they are terminated. For employers who employ fewer than 15 employees (by head count), the minimum employment period is 12 months. For employers who employ 15 or more employees (by head count), the minimum employment period is six months.

This means that employers are freed from the obligation to give warnings, have meetings, or other procedural niceties if they terminate an employee within this period. An employer is only required to advise the employee that “we see no future in the employment relationship”. This can be done by email, text, over the phone, or in person. There is no need for a formal meeting.

One thing though, employers are not permitted to terminate an employee for an “unlawful reason”. If you decide that you “don’t see a future in the employment relationship” because you don’t like people who complain about wages, ask for leave (e.g. sick leave, compassionate leave), or join a union then you will be acting unlawfully and the employee has other forms of redress available with significant fines attached. 

The important thing to remember is that the minimum employment period has essentially replaced what we used to call a probationary period. You can terminate someone who is not fitting in, performing reasonably, or acting appropriately during this period and they cannot pursue an unfair dismissal claim.

Two things to remember:

1. You must either give them one week’s notice, (or pay in lieu); and
2. They must have finished working for you BEFORE the end of the minimum employment period. You cannot give notice two days before the end of the notice period and then let them work out the notice period because their actual “termination” date will fall AFTER the period. This would result in them being able to sue for unfair dismissal.