It may be easier to dismiss probationary employees under certain circumstances, but they still have rights
Q: What is the difference between probationary employees and regular employees regarding legal rights and disciplinary considerations?
A: Budget-conscious, risk-averse employers have in recent years increasingly relied on termination clauses, rather than probationary periods, to limit the costs of ending employment relationships. Nevertheless, probationary periods are still a valuable tool for employers in new employment relationships. This is in part because frequent changes to the law about how termination clauses must be written in order to be enforceable means that employers often cannot rely on their termination clauses if they have not been recently reviewed and updated.
While most employers know that a probationary period can be used to assess the suitability of an employee for both operational and workplace culture fit, many don’t under-stand what it really means for an employee to be “probationary.”
The main difference between probationary and regular employees is that employers can dismiss probationary employees without providing them with reasonable notice of termination — or pay in lieu of notice — under the common law if they are deemed to be unsuitable for the role.
On the other hand, regular employees are entitled to common law reasonable notice — or pay in lieu of notice — unless there is just cause for their dismissal or an enforceable termination clause in their employment agreement. Therefore, unsuitability, rather than just cause, is the common law standard for dismissing an employee without notice during the probationary period.
An employee may be unsuitable for a variety of reasons including workplace misconduct, performance concerns or because the individual simply isn’t working out in the role. That said, employers need to act in good faith in determining suitability during the probationary period to avoid liability. This involves allowing employees a fair opportunity to demonstrate their ability to do the job for which they’ve been hired and legitimately assessing whether the employee is suitable.
Probationary employees who are dismissed may still be entitled to statutory termination entitlements under employment standards legislation, which is distinct from common law reasonable notice. This is because Canadian employment standards legislation does not recognize probationary periods. This legislation provides for certain minimum termination entitlements for all employees with a certain length of service, which varies between provinces and territories. In Ontario, Alberta, Quebec and British Columbia, for example, employees with at least three months of service are generally entitled to statutory termination entitlements regardless of whether they are “probationary.”
While most employers know that probationary periods are generally an employee’s first three to six months on the job, many do not realize that probationary periods are not automatic. If employers want a probationary period, they need to include appropriate language in the employment agreement to clearly establish it.
Other than the differences in common law termination entitlements discussed above, probationary employees are generally entitled to the same rights and protections as regular employees, including their rights under employment standards, occupational health and safety and human rights legislation. Accordingly, an employer can discipline probationary employees just like any other employees, so long as they have reserved the right to do so in employment agreements and policies.
Although some employers may question whether to discipline a probationary employee — given that they can simply let them go without notice if they find the employee to be unsuitable — there can still be benefits to doing so. Namely, where a probationary employee has been disciplined, that discipline can serve as evidence that the employee is unsuitable and that the employer acted in good faith in determining their suitability.
Despite their limitations, probationary periods are a useful tool for employers to assess the suitability of new employees while also limiting the costs that the employer may incur if the employee is not suitable.