The Probationary Employee

It is not unusual for an employer to offer employment subject to a three- or six-month “probationary” term. In such cases, the term will form part of the offer of employment made to the employee. A “probationary employee” has been defined as follows:
“The term is well understood in business and industry as an employee who is being tested to enable the employer to ascertain the suitability of the employee for its purposes. Probation is a period when the employee may prove that he is suitable for regular employment as a permanent employee and will meet the standards set by the employee.”

If the work of a probationary employee proves unsatisfactory, can the employer terminate him without any further obligation? The answer depends on whether the employer can establish just cause and thereby avoid the common law obligation, which would otherwise exist, to provide reasonable notice. In the case of a probationary employee, cause will be found where the employee proves unsuitable for the position he has been given. Thus termination may be justified on grounds which go well beyond those which would support the discharge of a regular employee and may include such considerations as the employee’s character, compatibility, as well as his ability to meet present and future production standards set by the employer.

The employer will have to act fairly and with reasonable diligence in determining the employee’s suitability for the job. Where however, this can be shown, it will be easier to terminate a probationary employee without having to provide notice. The Courts, it should be noted, will examine whether the reason for termination was, in fact, the employee’s suitability for the job as opposed to some other reason or improper motive on the part of the employer which would not justify the dismissal.

One Court has gone further and indicated that where an employer seeks to terminate a probationary employee as unsuitable, the employer must demonstrate that it gave the employee a fair chance to demonstrate his ability to do the job. The Court said:
“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. As for the employer, he cannot be held liable if his assessment of the probationary employee’s suitability for the job is based on such criteria and a fair and reasonable determination of the question. In my opinion, the law does not require the employer to do more.”

In another case, a Court found that the employer had acted reasonably where a memo had been provided to the employee regarding his deficiencies, and was provided for the purpose of assisting the employee in making the adjustments required to perform his duties. In determining that there was cause for termination, the Court further observed that the termination “was not out of the blue; continued suggestions, advice and assistance had been given throughout.”

Does the employer have to provide the employee with all or virtually all of the probationary period to prove himself? This issue has not yet been conclusively decided. In one case, a Court found that fairness dictated that the employee be given a reasonable time, if not necessarily the full probationary period to show what he could do. In another case, however, a Court held that the employer had the right, if acting in good faith, to terminate at any time during the probationary period without further obligation.

If a probationary employee is terminated for failure to meet the standards of performance set by the employer, is he still entitled to notice pursuant to the Employment Standards Act? An employee is entitled to notice under the Employment Standards Act where he has been continuously employed for at least three months. Therefore, where an employee, at the commencement of his employment, is terminated before the completion of a three-month probationary period, he will not be eligible for notice under the Act no matter the reason for termination. Thereafter, an employee will be entitled to statutory notice unless he is terminated for willful misconduct, disobedience or willful neglect of duty. Where an employee is terminated upon the completion of a three-month probationary term or after a longer probationary period, for failing to meet the employer’s expectations, the employee may qualify for notice under the Act even if he is not entitled to reasonable law notice at common law.

If an employee is terminated during the probationary period without cause, is his right to reasonable notice affected by the fact of his probationary status? One Court has indicated that
probationary status is one factor to be considered in determining appropriate notice. An author of a leading employment law text has expressed a different view of the issue as follows:
“An employer can discharge a probationary employee by meeting a minimal just cause requirement. If however, an employer cannot establish just cause, this often means that the employer did not even make a good faith effort to assess the suitability of the employee or allowed improper motive to taint the decision. In such a case it does not seem to make sense to further reduce what is already a slight notice entitlement by reason only of the fact that the employee was terminated during a probationary period.”

An individual, who is offered a contract of employment subject to a probationary term, is well advised to consult with counsel, so that they fully understand the opportunity being provided, and what they are giving up.

This article is provided for information purposes only and does not constitute legal advice. Any individual questions or legal issues should be discussed with independent counsel.