Probationary Employees
By Melynda Layton LLB
As Published in September 2001 Issue of Up-Date OHRPA Newsletter
Probationary periods allow for a period of adjustment when both an employee and employer can assess suitability for permanent employment. While probationary periods are common, especially with less-senior employees, they must be expressly written into an employment agreement to have effect.
A recent decision of Justice Lederman of the Superior Court of Justice confirms this point.
Donna Easton was induced to leave long-standing employment with the Canadian Imperial Bank of Commerce to become a bookkeeper with Wilmslow Properties Corp. (“Wilmslow”). When she was terminated without cause after only two weeks of employment she immediately sought legal counsel and commenced a wrongful dismissal action. Wilmslow alleged that the reference within the offer of employment to a “90 day probationary period from start date” allowed it to terminate Ms. Easton’s employment without notice in the event she proved unsuitable for regular permanent employment.
Justice Lederman rejected Wilmslow’s position, noting that reference to a probationary period in the offer of employment was ambiguous as it did not articulate it was meant to be a period when Ms. Easton had to demonstrate she was suitable for permanent employment. Such a notion was contrary to both parties’ understanding that Ms. Easton was being hired as a permanent employee from the very beginning. The Court noted the phrase “probationary period” as used within the offer of employment did not, without further explanation, make Ms. Easton a probationary employee, thereby justifying her termination without cause or reasonable notice. In Ms. Easton’s case it simply meant her salary level was subject to probation in the sense that, if she sufficiently demonstrated her ability to perform the job, during the 90-day period, her salary would increase from $32,000.00 to $45,000.00 per annum.
Although there are no hard and fast rules regarding what must be stated within an employment agreement for a probationary period to be binding, the basic principles are as follows:
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The employment agreement must specifically indicate the probationary period is a time during which the employer will assess performance, attitude and overall compatibility.
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The employment agreement must specifically reference termination in the event performance during the probationary period is unsatisfactory.
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In order to limit an employee’s entitlement to payment in lieu of notice during a probationary period the agreement must specifically provide, “no notice or payment in lieu of notice shall be required within the probationary period”.
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The probationary period should be no longer than three months. In the event the probationary period is more than three months, the employment contract must comply with the Employment Standards Act which indicates an employee is entitled to notice of termination.
Employers must be cognizant of their obligation to treat employees fairly. Recent decisions of the Superior Court indicate it is improper for an employer to dismiss a probationary employee before the employee is given an opportunity to demonstrate his or her ability. The employer is further obligated to provide a fair evaluation and to warn an employee that his or her job is in jeopardy by providing the employee with a reasonable opportunity to correct any deficiencies prior to termination of employment. Some cases have even indicated that an employer must provide an employee with assistance to improve his or her performance. In the event of unsatisfactory performance, a clear warning is required such that the employee is made to understand the shortcomings of performance, and that there is a possibility of dismissal if performance is not improved. The most recent trend with respect to probationary employees is that there must be a “fair, honest and valid assessment” of the employee’s competence. The employer’s conclusion to terminate must be reasonable and properly motivated.
A clearly worded employment agreement coupled with knowledgeable managers charged with the responsibility of supervising probationary employees during the first months of employment are essential to minimize an employer’s risk of liability. Regular evaluations, both written and verbal, followed by a final assessment immediately prior to expiration of the probationary period will alleviate potential human resource concerns.
To ask a question or for further advice please contact Melynda at melynda.layton@careerlaw.ca or by telephone at 613-225-4400
