Recently, the Prince Edward Island Supreme Court in IUOE
Local 942 v. Health P.E.I., 2014 PESC 31 (CanLII) heard an
application by a union for judicial review. The Court reviewed a
decision of the Prince Edward Island Labour Arbitration Board (the
"Board"), which upheld the termination of unionized
Generally in a labour law context, collective agreements provide
that probationary employees do not enjoy just cause protection, and
thus, there is no onus on a unionized employer to establish just
cause upon termination. Likewise in this collective agreement,
permanent employees were given the protection of being dismissed
only for just cause, but probationary employees were not.
Notwithstanding the Employer's right to terminate
probationary employees at its sole discretion, it is well-settled
that the decision to terminate cannot be arbitrary, discriminatory,
or made in bad faith. In this case, the Court found that the
majority of the Board was reasonable in finding that the Employer
did not act in an unjust or unfair manner in terminating the
Employee, and thus the Union's application was dismissed.
This decision also recaps the law concerning termination of
probationary employees in a non-unionized workplace. The Court
disagreed with the Union's position that the decision of
Alexander v. Padinox Inc. (1999), 181 Nfld. & P.E.I.R.
317 (an employment law wrongful dismissal case) was a persuasive
authority in a labour law context. The Court of Appeal in
Alexander v. Padinox succinctly summarized the law in an
employment context as follows at paragraph 16:
"It is now settled law that the cause necessary to provide
the justification required to terminate a probationary employee is
less than the cause necessary to terminate a permanent employee.
Cause will be established if the employee is found to be
unsuitable for permanent employment. Similarly, if the
dismissal of a probationary employee is found to be unjust, the
notice period or the amount of compensation, in lieu of notice,
together with claims for other damages, will be calculated
accordingly." [Emphasis added.]
Overall, this decision reiterates that unionized employers are
not likely required to prove just cause in terminating probationary
employees (pursuant to the terms of most collective agreements) but
the decision to terminate cannot be arbitrary, discriminatory, or
made in bad faith. Non-unionized employers have the onus of proving
just cause for probationary employees, however, the justification
is less onerous than it would be in terminating a permanent
Lessons for Non-Unionized Employers
In determining whether the employee is suitable for permanent
employment, a non-unionized employer has the onus of demonstrating
that it acted fairly and was reasonably diligent in determining the
person's suitability for a permanent position.
The employer always has the inherent right, aside from human
rights legislation, to terminate the employment of an employee, and
is only required to give reasonable notice, or pay in lieu of
notice. However, to establish just cause, the employer should
ensure it has afforded the following opportunities to the
Review the conditions of probationary employment with the
employee at hiring and have the employee sign off on their
understanding and acceptance of these conditions.
Assess the employee's performance and suitability for the
position during the probationary period in relation to the
requirements of the specific position.Suitability for the position
may include an assessment of character and compatibility in the
Notify the employee during the probationary period of any
deficiencies and give the employee a reasonable opportunity to
improve performance/meet expectations.The employee should be
informed that failure to improve may result in termination of their
probationary employment. The scope of the evaluations and
assessments will depend on the length of the probationary
Furthermore, it is always prudent to enter into a written
contract of employment with a new employee that clearly sets forth
the probationary period, and the notice period to be given for
termination in the probationary period.
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