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The Myth of the Probationary Period

There is no such thing as a “probationary employee”.  Without a legally enforceable, written employment agreement new employees are entitled to wrongful dismissal damages regardless of the length of their employment.

Employers typically seek to impose a three or six month period, at the inception of employment, during which they can assess performance and suitability of the worker within the organization.  For this period of time to have any significant meaning, it must be clearly articulated in a written offer of employment.

The letter of offer or employment contract must set out the purpose of a probationary period including how performance will be evaluated; what happens if the Employee is unsuccessful;  and what will be paid on termination of employment?

Employers still have the onus of demonstrating there exists a reason for dismissal during a probationary period and that the decision was made in good faith. While an Employer may conclude that a probationary employee is unsuitable this conclusion should only be reached after the employee is given a fair opportunity to demonstrate their ability.

The Employment Standards Act, 2000 (Ontario) (“the ESA”) does not create a probationary status.  Although the ESA allows Employers to terminate Employees who have less then three months service without notice employment contracts must clearly indicate that the probationary employees’ entitlement is restricted to only the statutory notice period. 

Where the probationary time period exceeds three months or the contract does not restrict entitlement the Employee is entitled to payment of at least the minimum notice, detailed in the ESA. The common law notice requirement is presumed in employment contracts, and will only be rebutted by clear and unambiguous language in the probationary provision.

A properly drafted offer letter will clarify both the Employer’s and the Employee’s responsibilities during the probationary period and will provide legal protection to the organization in the event that the Employer determines the person is not suitable in the longer term.  However, it does not negate the Employer’s obligation to treat the employee fairly during the probationary period.

Where an Employer has reservations about performance, these must be discussed with the Employee who then must be given an opportunity to improve.  While the standard of “just cause” is a lower for short-term service employees, there is an obligation to provide objective performance feedback before concluding the probationary employee has not been successful.

Finally, during termination the Employer must rely on “just cause”.  It’s insufficient, to indicate, “we have decided that it is in our best interest to end your probationary employment”;  an Employer must assert cause for dismissal including the reasons why the employee was not successful.  The probationary Employee then has a right to challenge the reasons given either through negotiation with the Employer or a legal action.