What Exactly Is Probationary Employment?
Some legal terms, like "probationary employment" seem so basic that one presumes everyone knows what the term means. However, a recent appeal decision to Ontario Divisional Court illustrates that not everyone understands the term "probationary". Apparently, a Deputy Judge of Small Claims Court failed to understand the term when he ruled against an employer in a wrongful dismissal claim.
In Nagribianko v Select Wine Merchants Inc., the employee signed an employment contract which allowed a six month probationary period. Before the end of the six months, the employer dismissed the employee on the basis that "after careful consideration" the employee was "unsuitable for regular employment." The employee successfully sued the employer and was awarded four months wages in lieu of notice. The Deputy Judge found that the term "probationary period" was ambiguous in that the employee could not ascertain precisely what the period was. In other words, the Deputy Judge determined that the subjective understanding the employee had should govern the interpretation of the employment contract.
Divisional Court rejected this interpretation. Rather, it ruled that the term "probationary employment" like any term in a contract should be interpreted the way a reasonable person in the same circumstances as the parties making the contract would interpret the term. In this case, a reasonable person would understand that probationary employment is different from non-probationary employment and that the difference is whether the employment is at risk of ending without notice or reason.
Specifically, the court made the following comments:
[31] The standard for dismissal from non-probationary employment is suitability.
[32] The standard for dismissal from probationary employment is different. It is suitability.
[33] Probation is a testing period for the employer to assess a probationary employee's suitability. It offers the employer an opportunity to determine if the employee will work in harmony with the organization, if hired permanently. Suitability includes considerations of the probationary employee's character, ability to work with others, and ability to meet the employer's present and future standards...
[34] The nature of the employment relationship during probation is tentative....
... it is not appropriate to analogize from the legal and practical considerations pertaining to a regular employee in order to answer a question relating to a probationer's terms of employment. Probation is intended to ascertain whether a settled and ongoing relationship would work out. Its tentative nature is the controlling feature …
[35] A probationary employer must extend to the probationary employee a fair opportunity to demonstrate suitability for permanent employment. However, in the absence of bad faith, an employer is entitled to dismiss a probationary employee without notice and without giving reasons....
[36] Where the employment of a probationary employee has been terminated for unsuitability, the employer's judgment and discretion in the matter cannot be questioned. All that is required is that the employer show that it acted fairly in determining whether the probationary employee was suitable and that he/she was given a fair opportunity to demonstrate his/her ability.
Simply put, during a probationary period the employer does not have to provide a reason to terminate the employee. Nor does the employer have to give notice. Rather the probationary period allows the employer a second, or third, or fourth, opportunity to rethink its hiring decision and correct that decision if it wishes.
The Lesson: Signing a contract or verbally agreeing to extend a probationary period keeps the risk of employment loss on the shoulders of the employee. It is recommended that one attempt to negotiate a shorter period before signing the employment contract. Alternatively, if the employer offers employment only with the extension of the probationary period, try to ascertain the employers precise concerns so that they can be addressed allowing for permanent and secure employment.
Nagribianko v Select Wine Merchants Inc. 2016 ONSC 490. https://www.canlii.org/en/on/onsc/doc/2016/2016onsc490/2016onsc490.pdf
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