It is quite common for new employees to undergo a 3-month
probationary period when beginning new employment. But when an
employer terminates an employee within the 3-month probation
period, is the employee entitled to any termination pay?
Yes. While the employee may not be
entitled to reasonable notice or termination pay in lieu of notice
under Ontario's Employment Standards Act
("ESA"), the employee is entitled under common
In the recent Small Claims Court
decision of Deacon v. Moxey, 2013 CarswellOnt 5354, Deputy
Justice J. Sebastion Winny decided this issue. 46 year old Mr.
Deacon was fired by his employer from his sales position just 2
weeks after commencing employment. The employer defended Mr.
Deacon's claim for wrongful dismissal claiming an entitlement
to dismiss Mr. Deacon without cause during a probationary period of
3 months. The employer argued that section 54 of the ESA provides
that an employer has a general right to terminate an employee
without notice if the employment has not yet reached 3 months'
54. No employer shall terminate
the employment of an employee who has been continuously employed
for three months or more unless the employer,
(a) has given to the employee written
notice of termination in accordance with section 57 or 58 and the
notice has expired; or
(b) has complied with section 61.
Justice Winny held that section 54 does
not refer to a probationary period and does not say that an
employee working less than 3 months can be terminated without
cause. Section 8(1) of the ESA provides that civil remedies are not
affected by the ESA. Section 54 cannot displace the common law
obligation on an employer who dismisses an employee to give either
reasonable notice or pay in lieu of notice. Justice Winny went on
to award Mr. Deacon 3 months' pay in lieu of notice which was
somewhat reduced as Mr. Deacon became re-employed 7 weeks
While the ESA does not provide for a probationary period, an
employment contract entered into between the employer and the
employee can resolve this issue. The contract can provide for a 3
month probation period during which the employee can be fired
without cause, without providing reasonable notice or pay in lieu
of notice. Section 5(2) of the ESA indicates that if a contractual
term in an employment contract provides a greater benefit than an
applicable employment standard, the contractual term prevails. In
other words, as long as the contract provides for as much as or
more than the ESA standards, the agreement between the parties is
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).