Probationary period means no inducement and no notice required

An Ontario employer was entitled to dismiss an employee without cause or notice since the employee was still in his probationary period, the Ontario Divisional Court has ruled.

Alexander Nagribianko was hired on May 10, 2013, by Select Wine Merchants, a wine and spirit import agency in Toronto. His written employment contract set out a six-month probation period beginning on his first day of work, May 27.

On Nov. 21, 2013, Select informed Nagribianko his employment was being terminated because “after careful consideration” the company decided that he was “unsuitable for regular employment.” There were six days remaining in the six-month probationary period, so no notice or pay in lieu of notice was provided.

Six months after his termination, Nagribianko launched an action in Ontario Small Claims Court for wrongful dismissal damages. Nagribianko claimed Select hadn’t given him an employee handbook, which was referenced in the employment contract and contained a clause stipulating Select could terminate employment during the probationary period with written notice or payment in lieu of notice under the Ontario Employment Standards Act, 2000.

Nagribianko acknowledged that he understood what a probationary period was, meaning that if he performed well his employment would continue. He knew the purpose of a probationary period was to serve as a trial period during which the employer and employee assess each other and determine if the employment relationship can continue. He also said he had probationary periods in other jobs he had held.

However, the court found Select had induced Nagribianko to come work for him and Nagribianko “was prepared to bet on himself, that he had the self-confidence that he would do the job properly and would pass the probationary period. That was the gamble he was prepared to take.” The court ordered Select to pay Nagribianko damages in lieu of notice equal to four months’ salary and benefits.

Select appealed to the Ontario Superior Court of Justice (Divisional Court).

The appeal court noted that “the nature of the employment relationship during probation is tentative” and the employer “must extend to the probationary employee a fair opportunity to demonstrate suitability for permanent employment.” However, the employer can dismiss a probationary employee without notice or give reasons, as long as it acts in good faith. In addition, if an employer dismisses a probationary employee, it is on its own judgment and discretion that can’t be questioned, said the appeal court.

The appeal court found there was no evidence to indicate Select acted in bad faith and call into question the company’s discretion and judgment. It didn’t matter if Nagribianko didn’t receive a copy of the employee handbook as the employment contract clearly stipulated he had a six-month probationary period and Nagribianko understood what that meant, said the court.

“A reasonable person in the same circumstances as (Nagribianko) would have understood the term ‘probation’ to mean a period of tentative employment during which Select would determine whether (he) would be a suitable employee and would decide whether or not to make him a regular/non-probationary employee,” said the appeal court. “(Nagribianko) may have believed that the employer would find him to be a suitable employee, but a reasonable person in those circumstances would also have understood that that might not happen.”

The appeal court also found that Select could not have induced Nagribianko to come work for the company, as the existence of a probationary period makes it clear that permanent employment isn’t guaranteed and shouldn’t be expected.

“Probationary employment, on its face and by its nature, is inconsistent with any inducement or promise of long-term employment,” said the appeal court.