Probationary period: Common Law v. Employment Standards Law

| Wednesday, June 7th, 2017 | No Comments »

It is commonly assumed that the probationary period is an implied condition of employment. Although the probationary period is part of employment standards law – for instance, the Employment Standards Act (2000) in Ontario stipulates that employees employed for less than 3 months are not entitled to statutory notice – this does not mean that probation is an implied term of employment. Employees that are not subject to a probationary period clause may be awarded notice pay at common law in the event such issue is brought to court.

Including a probationary clause is especially important when dealing with highly skilled employees, as they would be entitled to a longer notice period if challenged in court. The clause should demonstrate that each party contemplated the need to test each others’ suitability, and the option for either party to choose to end the employment relation within the set probationary period. It is also necessary to ensure that the probationary clause adheres to employment standards legislation, as failing to do so will render the clause unenforceable. The probationary period, therefore, cannot be longer than what is stated in employment standards law ­– in Ontario, probation is a three-month period.

The courts have outlined the common law standards of termination during the probationary period that would relieve employers of a notice requirement.  In the case Mision v. Bank of Nova Scotia (1994) heard by the Ontario Supreme Court, there were guidelines outlined for the employer when demonstrating  that the employee was not suitable during the probationary period. Firstly, the employer should be able to justify the discharge of an employee on probation. This burden of proof is less than what is required for ‘just cause’ after the probationary period has ended. During the probationary period, the employer must demonstrate that the employee was not suitable, which may include more subjective reasons such as character, compatibility, uncertainty of future performance or their ability to meet business objectives, and so forth. The employer’s judgment towards the claim of unsuitability will not be questioned, however, the motivation for dismissal must be shown to be in good faith and not for unjustifiable reasons.

Overall, employers should be prepared to support claims of unsuitability as much as possible. Setting out instances that demonstrate unsuitability within the probationary clause would aid in this objective in the case it is challenged in court. Employers should also be cautious of limiting sick days to zero, as the courts have not been favourable to employers when including unpredictable circumstances within probationary clauses.

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