It takes a lot to hire and onboard new employees. As much as you intend to keep each and every one of your new hires, there may be a new employee you hired not too long ago that just isn’t working out. What do you need to know before you let them go?
What is a Probationary Period?
At common law, a clear meaning has generally been attached to the term “probationary employee”. Unbeknownst to many employers, however, the terms “probation” or “probationary period” do not actually appear in the minimum standards legislation of many Canadian jurisdictions. Nonetheless, many of these pieces of legislation do exclude employers from having to give employees a specified amount of notice of termination if the employee has not accumulated a specified amount of service with the employer (typically around 3 to 6 months). For convenience, we will be referring to this amount of service as probation or the probationary period.
How Long is the Probationary Period?
It varies depending on the jurisdiction which governs the employment relationship. For example, under Ontario’s Employment Standards Act, 2000, an employer is liable to provide an employee with statutory notice of termination if the employee has been continuously employed for at least 3 months. In other words, while the legislation doesn’t refer to the first 3 months as “probation”, there is no statutory requirement to provide pay or notice if you fire someone before they hit the 3-month mark of employment. In British Columbia’s Employment Standards Act, an employee is entitled to statutory notice of termination if they have been consecutively employed for more than 3 months. Statutory notice is only owed to an employee whose employment is governed by Alberta’s Employment Standards Code once that employee has been employed by the employer for more than 90 days. Under the Employment Standards Act in New Brunswick, an employer is required to provide to the employee statutory notice of termination if the employee has a continuous period of employment of at least 6 months.
Do You Owe a Probationary Employee Any Notice?
You might! Even though terminating an employee during their statutory probationary period may disentitle an employee from receiving statutory notice of termination, the employee may very well be entitled to common law reasonable notice, which can be quite a bit more! See section 3 of our previous blog for more information about this type of notice.
To determine what notice period a probationary employee may be entitled to, some questions you should ask yourself as an employer are:
- Does the employee have an employment contract?
- If so, is there a clause about a probationary period?
- Though some courts have taken a fairly bare-bones view of what qualifies as an “enforceable” probationary period, employers will want to include in their employment contracts the length of the probationary period and the employee’s entitlements on termination during this period.
- Assuming the probationary period clause is enforceable, consider the following questions:
- Was the employee made aware of the basis for their assessment before it began?
- Did you, as the employer, act fairly and with reasonable diligence in assessing the employee?
- Was the employee given a reasonable opportunity to demonstrate their suitability?
- Has anyone talked to this employee about their performance? Was given a chance to understand the expectations that would be used in assessing their suitability?
- Was your decision based on an honest, fair and reasonable assessment of the employee’s suitability, taking into consideration performance, job skills, character, judgment, compatibility, and reliability?
The employer that cannot say yes to the above questions, but nonetheless wishes to terminate their employee during the probationary period, may be on the hook for common law reasonable notice of termination.
What if We Agree to a Longer Probationary Period?
In this blog, we’ve covered probationary periods agreed upon by an employee and employer that are equivalent in length to the “probationary time period” set out in the applicable minimum standards legislation. You may, however, contract with your employee for a different probationary time period. Typically, this period will not be longer than 6 months but what is a reasonable period will depend on the circumstances. What you should keep in mind, as an employer, is that regardless of an employee’s entitlement to their common law/reasonable notice period, they are always entitled to the minimum period of notice in the minimum standards legislation. This means even if your contract says 6 months of probation, in most provinces, employees are entitled to statutory termination notice or pay after around 3 months.