• First Reference
  • About us
  • Contact us
  • 24th Annual Ontario Employment Law Conference 📣
  • Blog Signup 📨

First Reference Talks

Discussions on Human Resources, Employment Law, Payroll and Internal Controls

  • Home
  • About
  • Archives
  • Resources
You are here: Home / Employee Relations / Probationary period clause gets employer into hot water

By Doug MacLeod, MacLeod Law Firm | 3 Minutes Read March 14, 2017

Probationary period clause gets employer into hot water

probationary periodIncluding a probationary period clause in an employment contract is not a good idea unless your organization is prepared to assess the suitability of the employee during the probationary period.

Failure to do so can result in your organization being ordered to provide a probationary employee with common law reasonable notice of termination.

This blog discusses one such case.

Probationary employee awarded three months termination pay

The contractual language

In Ly v. British Columbia (Interior Health Authority), 2017 BCSC 42, an employee signed back an offer of employment which included the following sentence: “Employees are required to serve an initial probationary period of six (6) months for new positions.”

The contract was silent on the employee’s rights and the employer’s obligations with respect to terminating the employee’s employment during the probationary period.

What does the term “probation” mean?

The judge in this case stated:

The term “probation” is well understood in business and industry as one where an employee is being assessed by the employer to ascertain the suitability of the employee as a permanent employee: …(See paragraph 26)

What does assessing suitability require?

The judge stated:

An employer needs only to establish that it acted in good faith in its assessment of the probationary employee’s suitability: …

In determining whether an employer acted in good faith, courts have examined the process through which the employer determines whether the employee is suitable for permanent employment. While an employer is not required to give reasons for the dismissal of a probationary employee, that employer’s conduct in assessing the employee is reviewed by the court in light of various factors such as:

1) whether the probationary employee was made aware of the basis for the employer’s assessment of suitability before, or at the commencement of, employment;

2) whether the employer acted fairly and with reasonable diligence in assessing suitability;

3) whether the employee was given a reasonable opportunity to demonstrate his suitability for the position; and

4) whether the employer’s decision was based on an honest, fair and reasonable assessment of the suitability of the employee, including not only job skills and performance but also character, judgment, compatibility, and reliability: … (See paragraphs 57 and 58)

How much notice of termination was the probationary employee entitled to receive?

Because the judge found that the employer had not made a good faith assessment of the employee’s suitability, the judge concluded the employee was entitled to reasonable notice of termination using the Bardal factors:

Having considered the length of Mr. Ly’s employment, including the probationary term of his employment, along with his age, the character of his employment, the availability of his employment, and his experience, training and qualifications, I am of the view that a three-month notice period is reasonable in this case. (See paragraph 91)

 Lessons to be learned

  1. Think long and hard about whether you need a probationary clause in an employment contract.
  2. If the reason for this clause is to terminate a probationary employee with as little notice of termination as legally required then this objective can be accomplished with a properly worded termination clause.
  3. If you want to include a probationary period in an employment contract then make sure your organization makes a good faith effort to assess the employee’s suitability. This requires management time, including answering suitability questions from the probationary employee.
  • About
  • Latest Posts
Follow me
Doug MacLeod, MacLeod Law Firm
Employment and labour lawyer at MacLeod Law Firm
For the past 30 years, Doug MacLeod, founder of the MacLeod Law Firm, a Canadian labour and employment law firm, has been advising and representing employers in connection with employee terminations. If you have any questions, you can contact him at 416 317-9894 or at [email protected]
Follow me
Latest posts by Doug MacLeod, MacLeod Law Firm (see all)
  • Doug’s top 5 employment law stories of 2022 - December 13, 2022
  • Ontario government revokes law that violated unionized workers constitutional rights - November 8, 2022
  • Specific penalty clause renders an ESA termination clause unenforceable - September 13, 2022

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to email a link to a friend (Opens in new window)
  • Click to print (Opens in new window)
  • More
  • Click to share on Reddit (Opens in new window)
  • Click to share on Tumblr (Opens in new window)
  • Click to share on Pocket (Opens in new window)
  • Click to share on Mastodon (Opens in new window)

Article by Doug MacLeod, MacLeod Law Firm / Employee Relations, Employment Standards, Payroll / employment contract, employment law, Ly v. British Columbia (Interior Health Authority), Notice of termination, offer of employment, probation, probationary clause, probationary employee, probationary employee assessment, probationary employee suitability, probationary period, probationary period clause, reasonable notice of termination, termination pay

Get the Latest Posts in your Inbox for Free!

Electronic monitoring

About Doug MacLeod, MacLeod Law Firm

For the past 30 years, Doug MacLeod, founder of the MacLeod Law Firm, a Canadian labour and employment law firm, has been advising and representing employers in connection with employee terminations. If you have any questions, you can contact him at 416 317-9894 or at [email protected]

Footer

About us

Established in 1995, First Reference is the leading publisher of up to date, practical and authoritative HR compliance and policy databases that are essential to ensure organizations meet their due diligence and duty of care requirements.

First Reference Talks

  • Home
  • About
  • Archives
  • Resources

Main Menu

  • About First Reference
  • Resources
  • Contact us
  • 1 800 750 8175

Stay Connected

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

We welcome your comments on our blog articles. However, we do not respond to specific legal questions in this space.
We do not provide any form of legal advice or legal opinion. Please consult a lawyer in your jurisdiction or try one of our products.


Copyright © 2009 - 2023 · First Reference Inc. · All Rights Reserved
Legal and Copyright Notices · Publisher's Disclaimer · Privacy Policy · Accessibility Policy