Probationary Periods and Notice

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What exactly does it mean to be “on probation” or in a “probationary period” under Ontario employment law? With respect to an employer’s obligation to provide notice of termination or severance pay, it typically refers to an employee’s first three months of employment during which most employers assume that they do not have any legal obligation to provide such notice; nor must they provide severance. As will be seen, that assumption may be incorrect.

Section 54 of the Ontario Employment Standards Act, 2000

The reason that most employers presume that they can dismiss an employee during his or her first three months of employment without providing notice of dismissal is the wording of section 54 of the Ontario Employment Standards Act, 2000:

No employer shall terminate the employment of an employee who has been continuously employed for three months or more unless the employer… has given to the employee written notice of termination…

Working backwards, most employers (and indeed most employees) assume that since the Employment Standards Act provides that employees who have been continuously employed “for three months or more” are entitled to notice, by inference those employed for less than three months must not be entitled to anything. The question frequently put to me is: ‘Is that right? Employees who have worked for less than three months get nothing?’ The answer can be "no."

Employees who have been employed for three months or less may still be entitled to notice of termination.

Regardless of the length of time for which an employee has worked (and even in some cases even if the employee has never even started working), unless the employee expressly agreed in a written employment contract to accept only the minimum amount of notice prescribed by the Employment Standards Act, (see below) the employee may still be entitled to “reasonable notice of dismissal.”

Calculating “reasonable notice” is a complicated art, not a science.

Even if the employee did agree to a probationary period – and employees would always be well served by obtaining a legal opinion on whether their employment agreement is actually legally enforceable on this point – the termination must be warranted. Because a discussion of on what grounds an employer may legitimately reject an employee on probation is beyond the scope of this particular post, readers interested in this subject are encouraged to read the post: The Right to a Fair Opportunity on Probation.

Takeaways for Employees with Labour Pains

The takeaway for employees is: just because an employer has told you that you are “on probation” does not necessarily mean that they can fire you without notice or payment in lieu, even if you have been employed for less than three months. Certainly if you have been employed for more than three months and an employer advises you that you are “on probation” there are issues that need to be discussed.

Takeaways for Employers with Labour Pains

The takeaway for employers is: if you wish to place your new employees on probation, draft an employment agreement (or better yet, retain an employment lawyer to draft one for you) that specifically sets out what is meant by that probationary period.

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As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.