April 2, 2015 By: Dana Du Perron
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Many employers use probation periods to help assess a new hire’s ability to perform the duties of the position, or to determine if the employee is the right ‘fit’ for the organization. Such probationary periods can be a very useful tool, but as an employee, being ‘on probation’ at the beginning of one’s employment can be confusing. Understanding the difference between being on probation and being an indeterminate employee is important to ensure your rights are protected.

Employees are not automatically ‘on probation’. There must be a term in their contract that sets out the length of the probationary period in order for such a requirement to exist. Within the first three months of anyone’s employment, however, the employer can terminate the employee’s employment without providing any notice under the Employment Standards Act, 2000 (“ESA”) (although the employee may still be entitled to common law notice). Yet, simply being on probation does not necessarily mean an employer can terminate your employment at any time without providing you with notice. The ESA requires that an employee with at least 3 months’ service (but less than one year’s service) be provided with one week’s notice, or pay in lieu thereof, of the termination of their employment.

Accordingly, under the ESA, if the probation period is for anywhere up to 3 months, an employer can terminate a probationary employee’s employment without providing any notice or pay in lieu thereof. Furthermore, if the employment contract is not drafted a way that properly excludes an employee’s common law notice entitlements during the probationary period, a probationary employee will still be entitled to common law notice of the termination of his or her employment, even if he or she worked for the employer for less than 3 months. Remember, the ESA sets minimum entitlements so if the contract is silent as to an employee’s entitlement to notice upon termination during the probation period, the common law prevails. The common law notice in such circumstances may not be very high, but it will be a fact-specific inquiry that varies in each case.

If the employer has a probationary period that is longer than 3 months, which employers are entitled to have, the employer must provide the employee with at least the employee’s minimum notice entitlements under the ESA upon termination of employment, so long as they are terminated after the expiration of 3 months’ time. Again, if the employment contract does not properly oust the common law, the employer will be required to provide the employee with his or her common law reasonable notice despite the fact that the employee was still ‘on probation’. As a result, probationary employees who are on probation for longer than the 3-month minimum period set by the ESA are not so different from non-probationary employees as, in Ontario, except in certain limited circumstances, employers can terminate an employee’s employment at any time provided they comply with provincial legislation and their common law obligations.

In many instances, probationary employment is different from non-probationary employment simply because probationary employees are limited to their ESA minimum entitlements upon termination, while employees who have completed their probationary periods are entitled to common law notice, or some contractually set notice period that exceeds the minimum entitlements but is less than common law notice, upon termination.

Probationary periods may also be used to distinguish between employees in other ways. For example, you may only be eligible to participate in the employer’s benefit plan or receive other employment ‘perks’ upon successfully completing the probation period. As long as the employer is not disentitling an employee to a statutorily guaranteed item with the probation period, such distinctions are permissible.

Also, if an employer promotes an employee to a new position, they may be able to impose a probationary period on the employee with respect to the new position. In such instances, the employer will not be able to discard the employee’s previous service for the purposes of determining notice under the ESA (and severance entitlements if the employee is entitled to them) and may not be able to discard their service for the purposes of common law notice, depending on the circumstances.

Finally, it is important to know that being on probation does not mean an employer can terminate your employment for any reason. If an employer terminates an employee’s employment for reasons that violate Ontario’s Human Rights Code or as a reprisal for the employee trying to enforce their rights under various legislation such as the Occupational Health and Safety Act, the termination will be unlawful and the employee will be entitled to damages regardless of the fact that he or she was on probation.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2017 Nelligan O’Brien Payne LLP.

Service: Employment Law