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Q&A: Termination rights for probationary employees

probationary employeesIn this conference Q&A, we address the rights of probationary employees at termination.

In partnership with Stringer LLP, First Reference Inc. hosted the 19th Annual Employment Law Conference on June 12, 2018, where we discussed the latest legal developments including issues surrounding best practices surrounding employee discipline and discharge.

We received a large number of questions from conference attendees during the Q&A session. Though we could not answer them all during the conference, the First Reference Blog will be updated weekly until further notice, to provide further clarity on this year’s hot topics based on the questions we received.

This blog post deals with several questions from the same conference participant regarding terminating a probationary employee.

Question 1:

Does an employee have any rights when terminated within the probation period (of 3 months)? This was done after a performance improvement plan was created with warning to employee. The worker was also paid off for eight weeks with no notice of termination.

A:

First it is important to clarify that the use of a probationary period is a common business practice when hiring new employees. It is not covered in the Employment Standards Act or under other law but is valid principle under common law. All employees have rights stemming from the employment relationship, even employees on a probationary period. It is also important for the employee to know of the probationary period prior to accepting employment, and it must be agreed upon in a written employment contract or separate agreement.

Often times, the probationary period lasts for the first three months of employment from the date of hire, and the time period is evidenced in the agreement.

A probationary period in employment refers to hiring employees on a trial basis for a predetermined period before deciding and confirming them into a permanent position. Among other objectives, this probationary period is used to:

  • verify that the selected employee will be able to meet the employer’s expectations;
  • determine the employee’s ability to do the job; and
  • observe additional factors that are important in the employment relationship.

Section 54 of the Ontario Employment Standards Act, 2000 (ESA) provides that only employees with three or more months of service are entitled to receive written notice or pay in lieu of notice. Therefore, any employee with less than three months is not entitled to any notice of termination, leading to the common practice that during a contractual probationary period, an employee is not entitled to any notice of termination.

Even if you want to terminate an employee during a probationary period with or without notice, no matter how long the notice is, the employer needs to conduct at least one interim review of the employee’s performance before the probationary period ends so the employee is aware of any issues and has time to improve and know if he or she will be successful at keeping his or her employment. The employer should also provide a final review at the end of the period to determine whether to terminate or retain the employee.

To terminate probationary employees with or without notice, the employer needs to find them “unsuitable.” That is the current standard for termination. In other words, termination can’t be arbitrary and the employer must be able to document why the probationary employee was unsuitable. Suggested criteria to use include quality of work, completeness, accuracy, productivity, punctuality, character, judgment, conduct, attitude and professionalism.

Question 2:

Can the employee sue the employer for unjust dismissal or for harassment while in employment?

A:

Yes, probationary employees are not disqualified from pursuing a claim of unjust dismissal or harassment, if they think they have a valid claim. With that said, all claims must follow the proper procedures through the appropriate channels and must be proven in court.

If wrongful dismissal actions are to be avoided, the employer should ensure that any termination of a probationary employee is conducted fairly and reasonably. When an employer wants to terminate an employee during the probation period, the employer must show that he or she acted fairly and with reasonable diligence in determining whether or not the employee was suitable in the job for which he or she was hired and being tested.

Question 3:

How many chances must be given to the employee after a performance improvement plan?

A:

There is no statutory minimum or maximum on how many chances the employer must provide an employee after a performance improvement plan to terminate the employee whether they are on probation or not. Rather, employers should have an established progressive discipline policy outlining standards of discipline that indicates how to prescribe, impose, vary or rescind penalties, including written warnings and termination of employment, which may be applied for breaches of discipline or misconduct.

What is important is that the performance improvement plan must help the employee improve, and include a couple of disciplinary actions so that the employee may be given a written warning at the same time. If the employee does not improve, the performance improvement plan will give the employer evidence that it has followed correct procedures, otherwise the employer may be at risk of a claim for unfair dismissal. Moreover, the employee must be made aware of what is expected, what is and isn’t acceptable behaviour or performance, and any penalties for specific types of behaviour if the situation does not improve.

Deciding when to give a final written warning and terminate the employee will depend on the circumstances specific to a situation and the time period set in the performance plan for the employee to correct the situation. However, courts and tribunals expect that employers will apply disciplinary measures consistently and fairly. Meaning, if all other factors are equal, similar misconduct is expected to be treated alike when it comes to issuing discipline.

The purpose of the final written warning is to try one last time to correct a continued performance or conduct and behaviour problem by discussing it with the employee and providing a written record of that conversation before there is no further choice but to terminate. The final written warning is used only after a verbal warning, written warning or warnings have been given and no change in performance or conduct/behaviour has resulted, and when a disciplinary suspension or demotion is deemed not appropriate.

Learn more about probationary periods and effective employee discipline and discharge by consulting The Human Resources Advisor, Ontario edition. If you are not already a subscriber, try a 30-day free trial here.

 

Human Resources PolicyProLearn more about how to create an effective performance and progressive discipline policy by consulting Human Resources PolicyPro. If you are not a subscriber, try a 30-day free trial here.

 

Please Note: This article is prepared for information purposes only; it is not legal advice. Consult a lawyer before acting on it or to obtain legal advice or a legal opinion.

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Ava Z Moradi, JD

Editor at First Reference
Ava Moradi, JD, received a Juris Doctor (J.D.) at the University of Windsor, Faculty of Law in 2014. She is a writer, researcher and editor in employment and labour law at First Reference. She is one of the content editors for The Human Resources Advisor, Ontario, Western and Atlantic editions and a contributor to First Reference Talks and HRinfodesk.
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