Is there such a thing as a ‘probationary period’ for employees?
Many people think they know a lot about employment law. Many people do. Many people know a little about employment law and get confused about its’ application to certain issues. One of the most common issues that arises in is the “probationary period.”
Part of the reason this area is confusing is because it is an area where the Ontario Employment Standards Act and the common law run directly into each other. The Employment Standards Act sets out the minimum requirements for non-unionized employees in Ontario. This Act says that you do not have to provide notice of termination (or payment in lieu of the notice) to employees who have worked for you the employer for three months or less.
However, unless the employee has signed an employment contract that sets out a specific probationary period, the common law may still award damages for wrongful dismissal to employees terminated within the first three months of their employment.
This issue was recently revisited again by the Ontario Divisional Court, hearing an appeal from a Small Claims Court deputy judge (lawyer who sits as a judge part time) in the decision of Nagribianko v. Select Wine Merchants Ltd., 2016 ONSC 490 (CanLII). The employee had signed a contract before starting work, which set out specifically that his employment was subject to a six-month probationary period. The employee was terminated during the first six months because he was “unsuitable for regular employment.”
In finding that the deputy judge was wrong in concluding that the meaning of “probation” was not clear in the employment contract, the divisional court judge held:
“Probation is a testing period for the employer to assess a probationary employee’s suitability. It offers the employer an opportunity to determine if the employee will work in harmony with the organization, if hired permanently. Suitability includes considerations of the probationary employee’s character, ability to work with others, and ability to meet the employer’s present and future standards.”
As long as the employment contract, signed before the employee starts working, clearly sets out the length of the probationary period, then the test for awarding damages for “wrongful dismissal” to an employee terminated during their probationary period requires them to show the employer did not act fairly in determining whether they were suitable and did not give them a fair opportunity to demonstrate their ability.
This is different than termination after the probationary period where the employer must prove “just cause” or pay damages in lieu of notice.
Still confused? Talk to a lawyer who practices employment law. We can help guide you through this issue and avoid expensive wrongful dismissal lawsuits.