Sorry it didn’t work out: Dismissing probationary employees

|Canadian HR Reporter|Last Updated: 05/29/2002

When a probationary period is stipulated, it is almost always a requirement imposed upon new employees.


Mitchell v. R.

(1979), 23 O.R. (2d) 65 (H.C.), Madame Justice Van Camp offered the following definition of a probationary employee:

“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 employer...”

The precise duties and obligations during the probationary period depend upon what has actually been agreed to by the parties. One aspect of the probationary period that should be addressed is whether the employee is to be allowed all, or a substantial part, of the probationary period to demonstrate his worth. In the alternative, the employer can reserve the right to dismiss at any time during the probationary period without notice or pay in lieu thereof, subject to having just cause for the dismissal.

Stephens v. Morris Rod Weeder Co.

(1989), 27 C.C.E.L. 92, 76 Sask. R. 20 (Q.B.), is an example of a situation in which the Court found the contractual term relating to the probationary period contemplated that the plaintiff would be entitled to all, or virtually all, of the probationary period to demonstrate his capability. The plaintiff had received several verbal and written warnings concerning lateness and absenteeism. As a result, the defendant demoted the plaintiff and placed him on three months’ probation. While the Court questioned whether the defendant had the right to unilaterally impose a probationary period, it found the plaintiff accepted the demotion. The employer’s policy manual, however, provided that in the event of a transfer, an employee was to be given a 90-day trial period “to prove his ability to perform the job.” One month into the probationary period, the plaintiff was terminated on the grounds his attitude had not improved.

The Court held that:

“Fairness dictated that whatever the manner the three-month term was put into place, the plaintiff could expect to be given a reasonable time to show that he could meet the requirements of his new assignment… 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 as set by the employer...In my view, the defendant did not have reasonable and probable grounds to conclude after but one month into the term of probation that the plaintiff would in fact be unable to perform the work...the plaintiff was told... ‘you will be on a three months probation period, during which time your performance will be reviewed.’ So the plaintiff was entitled to the whole of the probationary period — three months...”

In contrast, in

Dieni v. Hopital general juif Sir Mortimer B. Davis

(1993), 9 C.C.E.L. (2d) 293 (Que. S.C.), the Court found the employer had the right, acting in good faith, at any time to terminate the employee during the probationary period without further obligation. The Court observed that this is the corollary of the fact that an employee may also resign at any time during the probationary period without notice if he is not satisfied with the position.

Judge Fanjoy, in

Cornell v. Rogers Cablesystems Inc.

(1987), 17 C.C.E.L. 232, 87 C.L.L.C. 14,054 (Ont. Dist. Ct.), summarized the law pertaining to just cause for dismissing probationary employees as follows:

“What is the duty of an employer to a probationary employee in the circumstances? This has been referred to in many reported cases; however, a good summary is contained in the judgment in

Kirby v. Motor Coach Industries Ltd.

(1980), 6 Man. R. (2d) 395 (Man. Co. Ct.) [reversed (1981), 10 Man. R. (2d) 36,81 C.L.L.C. 14,138):

1. The onus is upon an employer to show that it has ‘just cause’ to discharge even a probationary employee;

2. ‘Just cause’ may be that the employee is, in the opinion of the employer, unsuitable for a job;

3. The unsuitability which would justify the termination of a probationary employee may go beyond those grounds which might support the discharge of a regular employee, and may include such considerations as character, compatibility, as well as ability to meet the present and future production standards expected by the employer;

4. Where a probationer has been terminated for unsuitability, the employer’s judgment and discretion in the matter cannot be questioned,...

5. All of the foregoing is subject to the requirement of the employer showing that the discharge was in the bona fide exercise of the employer’s discretion and judgment that the employee was not suitable and not for some other reason or improper motive which would not justify a dismissal.”

Reference may also be made to the case of

Ritchie v. Intercontinental Packers Ltd.

(1982), 2 C.C.E.L. 147, 16 B.L.R. 74, 14 Sask. R. 206 (Q.B.). The plaintiff was hired as a “manager of human resource services” in the defendant’s plant. His responsibilities included the determination of personnel policies, settlement of union grievances and the motivation of staff. He was one of three people, in a plant of more than 800 employees, who reported directly to the president.

The plaintiff understood that he was hired subject to a six-month probationary period. During this time he was found to be unsuitable for permanent employment because of complaints that he was arrogant, abrasive and had acted unilaterally without consulting his supervisors. Mr. Justice Noble noted that, traditionally, “the common law gave a probationary employee little or no rights to recover damages if dismissed by his employer during or at the end of the period of probation. Justice Noble observed that, more recently, “the law governing the subject appears to have entered a discernable state of flux away from the unfettered discretion of the employer towards an attitude of greater fairness in dismissing the probationary employee.”

In dismissing the action, Justice Noble summarized the employer’s discretion in dealing with probationary employees:

“...where such an employee is fired, it seems to me that the only onus that rests on an employer to justify the dismissal, is that he show the Court he acted fairly and with reasonable diligence in determining whether or not the proposed employee was suitable in the job for which he was being tested. 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 to do anything more.”

The above edited excerpt is taken from

Wrongful Dismissal Handbook 2nd ed.

, by John Sproat (a partner with Toronto-based Miller, Thomson LLP), published by Carswell. For ordering information contact 1-800-387-5164.

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