Canada: How To Dismiss So It's Not Amiss – Termination Guidelines For Probationary Employees

Last Updated: March 31 2015
Article by Sydney Blackmore

Dismissing a short-term probationary employee can be a risky proposition, with expensive consequences if not done properly. Where just cause exists, the employee can be terminated with minimal risk that compensation will be awarded. However, in probationary employment, the decision to terminate is not always based on just cause. Instead it may be based on other considerations such as whether certain performance goals were met. This article focuses on how to terminate without just cause.

Statutory notice period

The Nova Scotia Labour Standards Code provides minimum standards for required notice when an employer terminates without cause. Other provinces have similar legislation. Section 72 of the Code sets out required notice periods based on the length of employment, but there is no minimum notice period for an employee whose length of employment is less than three months. The law requires that an employer must notify the employee in writing and on a date that is before the expiry of the three-month period.

The written notice must be addressed directly to the employee. In Robichaud v. Austrian Inn Limited, 2013 NSLB 125, for example, the labour board declined to recognize indirect notice. The employer wanted to rely on a sign that had been posted in the dining room as evidence of timely notice served to staff. The sign informed all customers that the Inn was due to close on a certain date. Even though it was posted where staff might have seen, it was phrased as a thank-you to customers and did not address staff. Therefore, the board found that notice was not given within the three-month period (although it was also held that the employer had done what it could to avoid the layoffs and the original decision against the employer was set aside).

This three-month period cannot be extended by an employee's unavailability. In Fish v. True North Diner, 2010 NSLST 2, the employer missed the deadline because the server it wished to terminate was on vacation at the time and could not be reached. The Tribunal, interpreting the exemption strictly, rejected that argument.

Common law dismissal

Despite the fact that compensation is not required by statute within the three-month period, it may still be required under common law. This can result in disproportionate notice periods for short-term employees. For example, in Deacon v. Moxey, 2013 CanLII 54099 (ON SCSM), a sales employee who was employed for only two weeks was awarded six and a half weeks of notice. Regarding the effect of statutory minimums, the court in Deacon v. Moxey stated:

[T]he Act does not confer on employers a general right to terminate, without notice, the employment of any employee whose employment has not yet reached three-months' duration. The Act establishes certain minimum employment standards. The Act does not codify the common law governing employment relationships...

An employment contract must be sufficiently explicit that the employee is probationary. If it is not, common-law notice may still result. In Lura v. Jazz Forest Products (2004) Ltd., 2014 BCPC 247, the defendant's argument that the claimant was a probationary employee failed because his alleged probationary status was not clearly spelled out in the employment contract.

Courts have increased common law damages when the employee was lured away from stable employment or other business enterprises. In Taggart v. K.D.N. Distribution & Warehousing Ltd, 1997 CanLII 14952 (NSSC), the plaintiff's offer letter contained no reference to a probationary period and, when he was terminated, there was no reference to the fact that he had been a probationary employee. The court refused to find that he had been on probation when he was dismissed and awarded six months' notice.

What this means for employers

There are certain actions an employer can take to mitigate the risks identified above:

  • Ensure there is an express reference to probationary status within the employment contract, including a timeline and the requirement to demonstrate an ability to meet standards of performance.
  • Consistently reinforce evaluative criteria during the probationary period.
  • Terminate in a good faith manner.
  • Terminate by direct notice to an employee in writing within the applicable labour standards exemption period (often three months).
  • If dismissing a probationary employee, ensure that the probationary employee's status is made clear in the termination letter.

With awareness of the associated risks and good and timely legal advice, an employer may be able to use the probationary period as it is intended; that is, as a way to determine whether the new employee will be the right fit and, if not, to end the relationship on a timely and less expensive basis.

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.

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Sydney Blackmore
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