Dismissing a probationary employee

When can a probationary employee not be summarily dismissed?

Tim Mitchell

Question: Is there any reason other than discrimination that an employer cannot summarily dismiss a non-unionized employee who is still on probation?

Answer: The employment standards legislation in most Canadian provinces only require the employer to provide statutory notice of termination after the employee has been employed for more than a specified period of time. For instance, in Alberta, an employee who has been employed for three months or less is not entitled to termination notice. The probationary term specified by employers often aligns with this statutory period. However, it is important to note that a probationary period of employment must be expressly agreed upon and can never be implied. Without an express agreement of a probationary term, an employer will be required to provide common law notice even if the employee’s dismissal occurs within the statutory “grace period.”

As the purpose of a probationary term is to enable the employer to determine the employee’s suitability for permanent employment, an employer is not required to meet the test of just cause to justify the summary dismissal of a probationary employee. Probationary employees have low expectation of job security, and may be discharged during the term of probation if that employee fails to meet the criteria set by the employer and is deemed to be unsatisfactory. Courts have found that if an employee was hired on a probationary basis and was dismissed in good faith within the probation period, the employee would have no action for breach of any implied term as to reasonable notice. That said, the employer still cannot dismiss a probationary employee arbitrarily so long as the dismissal is not motivated by discriminatory factors. Rather, the employer must demonstrate that it did not act in bad faith (or with an ulterior motive or intention to cause the employee loss or harm), and the employee had been given a fair, honest and reasonable assessment of suitability for the job.

As set out by the Alberta Court of Appeal in Rocky Credit Union Ltd. v. Higginson, to establish justification for the summary dismissal of a probationary employee, the employer is required to meet the following criteria:

• The employer has given the probationary employee a reasonable opportunity to demonstrate her suitability for the job.

• The employer decided that the employee was not suitable for the job.

• The employer’s decision was based on an honest, fair and reasonable assessment of the suitability of the employee. For this assessment, the employer is not limited to only the grounds that support the dismissal of a regular employee (i.e. job skills and performance), but may also consider factors such as character, judgment, compatibility, reliability and future with the company.

In the event the employer is able to meet the above criteria, the employee would have no action for reasonable notice of termination during the probationary period.

As the onus is on the employer to prove a probationary term, it would be prudent for the employer to enter into a written employment contract with the new hire that clearly specifies the probationary period. The employment contract should specify the amount of notice the employee would receive if dismissed during the probationary period, or refer to the statutory minimum set out in the applicable employment standards legislation.

Tim Mitchell practices management-side labour and employment law at Norton Rose Fulbright in Calgary office. He can be reached at (403) 267-8225 or tim.mitchell@nortonrosefulbright.com.

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