Probationary Periods

Probationary Periods

Probationary periods are the first months on the job when the employer and the new employee evaluate each other to see if the new hire is the right “fit” for both of them.

In Ontario, employers have no obligations when terminating an employee during the probationary period in terms of giving notice (telling the employee in advance that their job is ending on a certain date) or pay in lieu thereof (pay instead of advance notice that the job is ending).

As per the statutes, probationary periods in Ontario are three months long, but can be extended if clearly written into an employee’s contract. However, employees are entitled to reasonable notice if their employment is terminated after three months but during the extended probationary period.

Employee rights

There are circumstances where an employer may still have to pay damages (money) to a probationary employee, such as:

1. Where the new employee has been recruited from another secure position.

2. Where there is evidence of discrimination.

3. Where the decision to fire the probationary employee was made in bad faith [1].

4. Where the employee was not given a fair and reasonable opportunity to demonstrate his or her abilities or capability to perform the job. This included an absence of performance reviews and feedback, both negative and constructive [2].

Employer rights

Employers have the right to terminate the employment of a new employee during the probationary period without notice or pay in lieu. However, the employer must ensure that the employment contracts clearly set out the probationary period’s ending date and time lines for milestones and evaluations. The employer should certainly provide constructive feedback to the new employee and help the employee to transition in to the new position.

In Ritchie v. Intercontinental Packers Ltd. [3], the court concluded that:

“…where [a probationary] employee is fired, it seems … that the only onus that rests on an employer to justify the dismissal is that he show the court that he acted fairly and with reasonable diligence in determining whether or not the proposed employee is suitable in the job for which he was being tested. So long as the probationary employee is given a reasonable opportunity to demonstrate his ability to meet the standards the employer sets out when he is hired, including not only a testing of his skills, but also his ability to work in harmony with others, his potential usefulness to the employer in the future, and such other factors as the employer deems essential to the viable performance of the position, then he has no complaint.”

Conclusion

Probationary periods are a wise investment of time for all organizations and businesses to manage their staffing. Depending on the terms of the employment contract, employers have the right to fire employees before their probation ends without paying them any termination pay or pay in lieu of notice, but they must do so for defensible reasons.

Footnotes:

[1]  Longshaw v. Monarch Beauty Supply Co. Ltd., [1995] BCJ No. 2362 (BCSC)

[2]  Mison v. Bank of Nova Scotia, [1994] O.J. No. 2068

      Cao v. SBLR LLP, [2012] O.J. No. 3328

[3]  Ritchie v. Intercontinental Packers Ltd,. [1982] SJ No 78