Probationary employee can be terminated without notice — for legitimate reasons

Employer’s judgment and discretion in evaluating employee can’t be questioned: Court

The Ontario Divisional Court has found a former employee was unfairly awarded damages by the lower court after being let go during his probationary period.

The terms of the employment were set out in a written employment contract, which provided for a probationary period of six months. There was no dispute as to the length of the probationary period. The employee commenced his employment but was terminated before the end of this probationary period because “after careful consideration,” the employer concluded the employee was “unsuitable for regular employment.”

In reviewing the small claims court decision, Judge Mary Sanderson noted employers have probation periods to evaluate whether an employee is suitable for employment. The court concluded a reasonable person in the same circumstances as the employee would have understood that during probation her employment was tentative and unstable. Judge Sanderson held probation is a testing period for the employer to assess a probationary employee’s suitability, which includes considerations of the probationary employee’s character, ability to work with others, and ability to the meet the employer’s present and future standards.

However, a probationary employer must extend to the probationary employee a fair opportunity to demonstrate suitability for permanent employment. In the absence of bad faith, an employer is entitled to dismiss probationary employees without notice and without giving reasons. Judge Sanderson stated, where the employment of a probationary employee has been terminated for unsuitability, the employer's judgment and discretion in the matter cannot be questioned. All that is required is the employer show it acted fairly in determining whether the probationary employee was suitable and she was given a fair opportunity to demonstrate her ability. While Judge Sanderson held that the employee was not entitled to reasonable notice, she did not specifically state he was entitled to only his statutory notice.

Lessons for employers

Clearly-worded probationary clauses in employment contracts are necessary. It is also necessary to extend all probationary employees a fair opportunity to demonstrate suitability for permanent employment. However, a well-drafted termination clause, including a clause setting out the terms of termination during a probationary period, would be more helpful and allow for less interpretation by the courts.

Lessons for employees

Read all employment contracts and agreements carefully. Keep good notes of everything that occurs during a probationary period, especially if there are any indicators the employer is not acting fairly, or if you were not provided a fair opportunity to demonstrate your ability.

For more information see:

Nagribianko. v. Select Wine Merchants Ltd., 2016 CarswellOnt 891 (Ont. Div. Ct.).

Ronald S. Minken is a senior lawyer and mediator at Minken Employment Lawyers, an employment law boutique, located in Markham, Ontario. He can be reached at Ron gratefully acknowledges Sara Kauder, Kyle Burgis and Evelyn Perez Youssoufian for their assistance in preparation of this article.

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