Probation periods can be a really useful tool for small businesses. They give you time to confirm whether a new hire is the right fit, and they give your employee a chance to settle into the role with clear expectations.
But sometimes, despite training and feedback, it becomes clear the employment relationship isn’t going to work out.
That’s where an unsuccessful probation letter comes in. A well-written letter helps you document what’s happening, communicate the decision clearly, and reduce the risk of misunderstandings (or disputes) later.
In this practical guide, we’ll walk you through how to write an unsuccessful probation letter in Australia, what to include, what to avoid, and the steps you should take before you send it.
This article provides general information only and does not constitute legal advice. Your obligations and risks will depend on your specific circumstances, including the employee’s contract and any applicable industrial instrument (such as a modern award or enterprise agreement).
What Is An Unsuccessful Probation Letter (And When Do You Need One)?
An unsuccessful probation letter is a written notice to an employee confirming that they have not passed their probation and that their employment will end (or, less commonly, that the probation period will be extended).
For most small businesses, the letter is used when:
- the employee is still within their probation period (as set out in their contract), and
- you’ve decided their performance, conduct, or fit is not meeting the role’s requirements.
Even if your employment contract doesn’t explicitly require a letter, putting your decision in writing is usually a smart move. It creates a clear record of:
- what decision was made,
- when it was communicated, and
- what the next steps are (final day, return of property, final pay, etc.).
Just as importantly, a clear letter helps you keep the conversation respectful and professional, which matters for your team culture and your employer brand.
Probation Vs “Minimum Employment Period” (They’re Not The Same)
A common trap is assuming that because someone is “on probation”, you can end the employment with no risk.
In Australia, the probation period is usually a contractual concept. The “minimum employment period” (commonly 6 months, or 12 months for a small business employer) affects eligibility for certain claims like unfair dismissal.
This means you still need to be careful, even during probation, particularly around:
- discrimination and general protections risks (these can arise from day one),
- award or enterprise agreement obligations, and
- notice requirements under the employment contract and the Fair Work Act.
Starting with a clear Employment Contract is one of the best ways to avoid confusion about probation length, notice, and expectations.
What To Do Before You Write The Unsuccessful Probation Letter
Before you put anything in writing, it’s worth taking a short pause and checking you’ve followed a fair and defensible process.
Even if you’re confident the employee isn’t the right fit, the steps you take leading up to termination can make a big difference to how smoothly the exit goes.
1. Check The Employment Contract, Award Or Enterprise Agreement
Start with the basics:
- Probation length: What does the contract say? (3 months? 6 months?)
- Notice during probation: Is there a shorter notice period in the contract for probation?
- Policies and procedures: Are there internal processes you’re expected to follow?
In some industries, a modern award or enterprise agreement may affect notice, classification, pay, and other minimum conditions. They don’t usually prescribe a detailed “termination process” for probation, but they can still set rules you need to comply with. If you’re unsure what applies, it can be worth getting advice before acting.
2. Document The Issues (Keep It Factual)
You don’t need a huge dossier, but you should be able to point to clear reasons behind your decision.
Good examples of documents to keep include:
- probation review notes,
- performance feedback emails,
- training logs or checklists,
- incident reports (if relevant), and
- KPIs or measurable outcomes that weren’t met.
As a rule, write things down as facts, not opinions. For example, “missed 3 customer bookings due to not following the booking procedure” is more useful than “doesn’t seem to care”.
3. Give Feedback (And A Chance To Improve Where Reasonable)
Many small business owners ask whether they have to give a formal warning during probation.
There’s no universal requirement that you must issue warnings during probation, but it is often good practice to:
- tell the employee what isn’t meeting expectations,
- explain what “good” looks like, and
- give a reasonable chance to improve (depending on the role and the issue).
If the issue is serious (for example, safety breaches, dishonesty, or aggressive conduct), you may not need to provide multiple chances. In those cases, it’s especially important to document what happened and follow a careful process.
4. Consider Whether An Extension Makes Sense
In some situations, an extension to probation can be a practical middle path, particularly where:
- the employee is improving but not quite there yet,
- they haven’t had a fair opportunity to demonstrate capability (e.g. delayed training), or
- the role changed significantly during probation.
If you do extend probation, it’s best to confirm it in writing with clear goals, timeframes, and what will be reviewed.
How To Structure An Unsuccessful Probation Letter (With A Practical Checklist)
Your unsuccessful probation letter should be clear, short, and professional. Think of it as a confirmation of what you’ve already discussed (or are about to discuss in a meeting), rather than a place to vent frustrations.
Here’s a practical checklist of what to include.
1. Basic Details
- Date of the letter
- Employee’s full name
- Position title
- Employer entity name
2. A Clear Statement That Probation Was Unsuccessful
Be direct, but respectful. Avoid vague wording that leaves room for confusion.
For example, you can say:
- “We are writing to confirm that you have not successfully completed your probation period.”
3. Confirmation Of Termination And The Effective Date
Clearly state that employment will end and specify the effective date (usually the final day of employment).
This is also where you note whether the employee is required to work out notice or if you’ll provide payment in lieu of notice (if applicable under the contract, award, and Fair Work rules).
4. Reason(s) For The Decision (Brief And Factual)
You don’t have to write a long essay. In fact, overly detailed letters can create unnecessary risk.
A good approach is a short paragraph summarising the key issues in a factual way, for example:
- performance not meeting required standards,
- repeated errors after training,
- failure to follow workplace procedures, or
- conduct concerns (if relevant).
Keep it anchored to role requirements, not personality.
5. Final Pay And Entitlements
Include a short statement that the employee will receive all final entitlements, including:
- payment for hours worked up to the end date,
- unused accrued annual leave (if applicable), and
- any other owed amounts under the contract/award.
Be careful about making promises you can’t keep (for example, paying bonuses that aren’t actually payable). If your employee asks questions about calculations, it’s often best handled in a separate final pay summary.
6. Return Of Company Property And Handover
If relevant, list what needs to be returned by the final day, such as:
- keys, access cards, uniforms, tools, laptop/phone,
- customer lists or documents, and
- any other business property.
Also include instructions about access to systems (e.g. email, CRM). For smaller businesses, you might handle this in the exit meeting, but it can still be helpful to reference in the letter.
7. A Polite Closing
Keep the tone firm but courteous. You don’t need to “soften” the decision with confusing language, but you can remain respectful:
- thank them for their efforts,
- wish them well, and
- provide a contact point for questions about final pay or the exit process.
Key Legal Risks To Avoid When Writing An Unsuccessful Probation Letter
Most probation terminations are straightforward, but it’s the edge cases that can create real risk for small businesses.
Here are some common issues to watch for when drafting an unsuccessful probation letter in Australia.
1. Discrimination And Adverse Action Risks
Even if someone is new, you generally can’t take adverse action for a prohibited reason (for example, because of pregnancy, disability, family responsibilities, religion, race, or because they exercised a workplace right).
In practice, this means you should avoid:
- referencing protected attributes in the letter,
- linking the termination to sick leave or complaints they made, or
- using language that could be interpreted as retaliatory.
If there’s any complexity (for example, performance issues connected to medical leave), it’s worth getting advice before sending the letter.
2. Not Following Your Own Process Or Policies
If your contract or workplace policies set out a process (probation reviews, performance management steps, etc.), not following that process can undermine your position.
This is one reason having clear Workplace Policy documents matters: they set expectations and help you manage issues consistently.
3. Confusing Or Contradictory Language
A probation termination letter should be decisive.
Avoid wording that suggests:
- the employee “might” be terminated (if you’ve already made the decision),
- they are being dismissed for serious misconduct (unless you are very confident and have evidence), or
- you are making findings you can’t support.
If you’re unsure how to classify the situation, keep the letter simple: probation was not passed and employment will end with notice.
4. Getting Notice And Final Pay Wrong
Notice can be set by:
- the Fair Work Act 2009 (Cth),
- the employment contract, and/or
- a modern award or enterprise agreement.
If you underpay notice or miscalculate final entitlements, the issue can quickly turn from “probation didn’t work out” into a wage dispute.
It’s also important not to withhold pay as leverage for returning company property. If you’re dealing with a difficult exit, get advice on the right approach.
Unsuccessful Probation Letter Template: Example Wording You Can Adapt
Below is an example of what an unsuccessful probation letter may look like. You should adapt it to your circumstances and ensure it matches your contract, award obligations, and the facts.
Example: Unsuccessful Probation Letter
Private and Confidential
Dear ,
Re: Outcome of Probation Period
We are writing to confirm that you have not successfully completed your probation period in your role as with .
As discussed, your employment will end effective . In accordance with your employment terms, you will be provided notice.
The decision has been made because your performance has not met the requirements of the role during the probation period, including:
Your final pay will include all amounts owed to you up to your final day of employment, including any accrued but unused entitlements that are payable on termination (such as annual leave, if applicable). These amounts will be processed in accordance with our normal payroll cycle.
Please return all company property by your final day of employment, including .
We appreciate the work you have performed during your time with us and wish you all the best for the future.
Kind regards,
Optional acknowledgement:
I, , acknowledge receipt of this letter.
Signature: ______________________ Date: ______________________
Should You Include A Meeting Invite Or Deliver It After The Meeting?
In most cases, it’s best practice to:
- hold a short meeting to communicate the decision respectfully, then
- send the unsuccessful probation letter immediately after the meeting (or hand it to them in the meeting).
This reduces the risk of the employee feeling blindsided by an email and gives them a chance to ask logistical questions (final pay timing, return of property, etc.).
Key Takeaways For Employers
- An unsuccessful probation letter is a written confirmation that an employee has not passed probation and their employment will end (or probation will be extended).
- Before terminating, check the employment contract, applicable award or enterprise agreement, and confirm notice and final pay obligations.
- Keep the letter short, factual, and clear: confirm the outcome, end date, notice arrangements, and practical exit steps.
- Avoid language that could increase risk, especially around discrimination, workplace rights, or claims you can’t substantiate.
- Having clear employment documentation from the start (including an Employment Contract and sensible Workplace Policy documents) makes probation management much smoother.
If you’d like help managing a probation termination or getting your employment documents in order, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
