Question: If an employer isn’t sure how a probationary employee is working out, is there a recognized limit to how many times it can extend the probationary period?
Answer: Contrary to popular belief, there is no automatic probation period for employees. Some employment standards legislation, such as the Employment Standards Act, 2000 (Ontario), does not require notice of termination pay during the first 90 days of employment, which is often construed as a probationary period though it is not labelled as such. However, unless the contract provides otherwise, the employee will still be entitled to reasonable notice pursuant to common law. If an employer wants to treat this period as a probationary period, such that it can dismiss an employee without providing notice, this must be established by including a clause to this effect in the employment agreement.
The contractual clause should clearly set out the implications and entitlements. Simply saying that “the employee will be subject to a three-month probationary period,” for example, is arguably ambiguous and may not relieve the employer of the obligation to provide notice of dismissal. Rather, the clause should clearly state that the employee can be dismissed without cause or notice during the first 90 days of employment.
The clause can also provide the employer with the right to extend the probationary period. However, the minimum notice requirements of applicable legislation must be met. In Ontario, this means that once the employee has been employed for three months, she is entitled to one week of statutory notice or the equivalent pay in lieu of notice unless there is just cause to dismiss her. Removing common law notice in this period is possible, however, by including a clause to this effect in the employment agreement.
If an employer intends to include a probationary period in the employment agreement, it is crucial to include wording which dispenses with reasonable notice in the common law. Do not think that a short-tenure employee is not owed reasonable notice at common law. Courts have awarded terms of reasonable notice longer than an employee’s tenure at their job! In the 2012 Ontario decision Cao v. SBLR LLP, for example, an employee six weeks into her probationary period was dismissed. She sued in Small Claims Court and was awarded a reasonable notice of four months.
For more information see:
• Cao v. SBLR LLP, 2012 CarswellOnt 9184 (Ont. S.C.J.).
Stuart Rudner is a founding partner of Rudner MacDonald LLP, a Toronto-based employment law firm. He is the author of You’re Fired: Just Cause for Dismissal in Canada published by Carswell, a Thomson Reuters business. He can be reached at [email protected]. This article was co-written by Geoffrey Lowe, an associate with Rudner MacDonald. Geoffrey can be reached at [email protected].
