Practice makes perfect? For employees in Canada, they might have to practice their job before becoming permanent – but only if the employer handles it properly.
In Canada, it’s a common practice for employees to start their employment with a probationary period – essentially a “trial run” of employment where the employee has less legal protection than full-status employees. However, as is typical in Canadian employment law, there are rules that employers have to follow to make a probationary period effective and free from liability for employers.
Generally, a probationary employee doesn’t have full employee status until successful completion of the probationary period – often access to things like vacation entitlements and benefits doesn’t kick in until the end of this period. Some employers even provide a small raise upon completion. And if the employer doesn’t think the employee is doing a good job, it can be a little easier to terminate their employment, as the employee can usually be dismissed without notice or pay in lieu of notice at any time during the period.
Employment standards and probationary periods
Employment and labour standards legislation across Canada addresses probationary periods at the start of employment by allowing for a certain period of time during which employers can terminate employees without any minimum statutory notice, but the length can vary depending on the jurisdiction. For federally regulated employers, the probationary period is three months, with several other jurisdictions matching that. There are a few jurisdictions that allow for as long as six months and a handful with 90 days. It’s incumbent upon employers to know what applies in the jurisdiction in which they’re operating.
In Canada’s most populous province, the Ontario Employment Standards Act, 2000, doesn’t directly refer to probationary periods, but it doesn’t require any minimum notice to terminate an employee during their first three months of employment. However, as with the regular statutory notice requirements, it doesn’t eliminate common-law notice entitlements.
While probationary periods are covered in legislation, employers don’t have to use them. They are free to start employees on the job with full status, with all the associated legal entitlements and obligations. There is no statutory requirement for employers to put new employees on probation.
Similarly, probationary periods aren’t automatic. Despite the statutory limits, probationary periods can’t be implemented unless the employment contract specifically allows for them and specifies that there’s no notice or severance entitlement during this period, with the employee agreeing to the terms. The parties can also contractually agree to a probationary period longer than what’s set out in employment standards legislation, but the statutory minimum notice will apply beyond the statutory probationary period.
Fair assessment of suitability
Even with all of this, believing that an employer can simply fire a probationary employee for no reason would be a misconception. The purpose of a probationary period is for the employer to fairly assess the employee’s skills, performance, and suitability for the position – and the employer has a legal duty of good faith in this assessment, as it does in other aspects of the employment relationship. If a probationary employee is dismissed without a fair and good-faith assessment of their performance, then the employer could be liable for the same damages as it would for wrongful dismissal of any employee.
In the Ontario case of Cao v. SBLR LLP, a worker signed an offer letter that confirmed a 90-day probationary period along with an employee manual that stated performance issues would be addressed in meetings with management, where suggestions for improvement would be made. However, one month into the worker’s employment, she was fired for not performing at an acceptable level. The court noted that employers who terminate probationary employees must act “fairly and with reasonable diligence” in assessing the employees’ suitability and found that the worker wasn’t given a reasonable opportunity to demonstrate her ability to meet the employer’s standards. Noting that the employer provided no evidence that the worker was unable to perform the requirements of her job, the court awarded the worker four months’ reasonable notice of termination for her one month of work.
Another Ontario case, Ontario Shores v. Ontario Public Service Employees’ Union, Local 331, involved a unionized health-care worker who was hired under a collective agreement that allowed the employer the discretionary right to dismiss a probationary employee based on suitability for the job. The worker was subject to a mandatory one-week training period, but missed most of it due to a death in the family. Once she underwent training, none of her trainers advised her of any concerns. However, the trainers told a senior manager that they were worried about certain issues and, when the worker was advised of this, she was surprised. A short time later, the worker was terminated for failing to meet the probationary standards of her position. An arbitrator found the dismissal to be contrary to the purpose of probation, as the worker had only been given eight days of active employment that had been split up, and not been advised of her need to improve to meet standards. The worker was awarded one month’s salary in wrongful dismissal damages.
On the other hand, if the employer uses the probationary period for its intended purpose, terminating the employee without notice is doable. We can look to a case from the Yukon, Schaer v. Yukon (Department of Economic Development), where the territorial government hired a worker with an employment agreement that included a six-month probationary period and a clear option to extend it for up to six more months. The employer did just that five months into the worker’s employment, extending the period due to performance issues. The worker disputed his performance issues and the extension, arguing that he hadn’t received feedback.
The worker then refused to discuss his performance issues on the advice of his legal counsel, and the employer released him for cause. The court found that the worker was notified of his performance issues in conjunction with the probationary period extension and refused to discuss them further. This refusal made the employment relationship untenable and dismissal was appropriate, said the court.
The path to firing a probationary employee without notice is shorter – but the proper path to dismissal must still be followed.