Debunking the Myths about Probationary Employees

Jul 28, 2014

According to thelawdictionary.org the word probation means: “Determining if a candidate is suitable for a job before giving his full time creditation as a member of an organization.”

Most employers believe that a probationary employee can be terminated at any time with no notice. Not true.

To achieve this objective, the employer must clearly set out the employer’s rights in an employment contract.

For more information about employment contracts, click here

Here are five questions we are asked about probationary employees

Q1 – Can we avoid paying termination pay to a probationary employee?

A – Under the Employment Standards Act (ESA), an employer has no obligation to provide notice of termination to an employee with less than 3 months service. If the employee has signed an employment contract with a termination clause that limits the employee’s rights to ESA minimums then the employer can avoid this obligation.

For more information about the ESA, click here 

Q2 – Can we extend an employee’s probationary period?

A – An employer can extend the probationary period and we suggest reserving this right in an employment contract. However, an employer cannot avoid the minimum notice requirements under the ESA. An employee who has worked more than 3 months and less than a year is owed one week notice of termination (or one week pay in lieu of this notice). On the other hand, if the probationary period is extended, and the employee has not signed an employment agreement with a termination clause then the employee is entitled to “reasonable” notice of termination which could be three months or more. A big difference.

For more information on wrongful dismissal, click here

Q3 – Can we delay a scheduled wage increase at the end of a probationary period?

A – It depends on the wording of the employment contract. If the contract states that the person’s wage rate will be increased after 3 months without any qualification- then failure to do so is likely a breach of contract.

Q4 – Can we delay an employee’s eligibility to receive employee benefits?

A – It depends on the wording of the employment contract and the terms of the group benefit plan.  If the contract says the employee is entitled to enroll in group employee benefit plans after a 90 day waiting period without qualification then failure to do so is likely a breach of contract.

Q5 – Can we terminate an employee during the probationary period for any reason?

A – No. If a person becomes disabled during a probationary period and is terminated for this reason then there has been a violation of Ontario’s Human Rights Code. An employer cannot contract out of the Code. Accordingly the disabled employee in this example could commence an application under the Code and be awarded damages for lost income as well as general damages.

For more information on Ontario’s Human Rights Code, click here

For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him at 416 317-9894 or at [email protected]

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