Are there ANY limits on an employer firing an employee
during the initial probation period?
The Divisional Court recently weighed in on this evolving issue
in Nagribianko v Select Wine Merchants Ltd., 2016 ONSC 490
Nagribianko is a significant decision addressing the
conflicting rights of employers and employees during probation
In Nagribianko, the appellant employer — a wine
and spirit import agency — entered into a written employment
contract with the plaintiff employee. The employment contract was
fairly detailed. It provided for an annual salary of $65,000; the
right to participate in certain benefit plans and programs; a
monthly car allowance of $750; paid vacation days, accrued at a
rate of 6% of total earnings; use of a company laptop; and
reimbursement of up to $150 per month for the business use of the
employee's Â personal mobile communication device. It
also provided for a probationary period of 6 months.
The employer terminated the plaintiff after 4 months (still
during the probation period) because "after careful
consideration", the employer concluded that the plaintiff was
"unsuitable for regular employment." The plaintiff
subsequently sued for wrongful dismissal.
At trial, the employee sought remedies for wrongful dismissal,
including damages for reasonable pay in lieu of notice.
The trial judge found that the meaning of "probation"
was not clear on the face of the contract, and therefore considered
the parties' subjective understanding of probation. The trial
judge accepted the evidence of the employee that he was
"induced" to work for the employer on the understanding
that acceptance of the job would ultimately lead to permanent
employment. The trial judge awarded the plaintiff damages in lieu
of notice equivalent to four months' salary and benefits.
On appeal, Justice Sanderson of the Divisional Court reviewed in
detail the nature of the employment relationship during probation,
finding that it was "tentative" at best. Her Honour went
on to find that "a probationary employer must extend to the
probationary employee a fair opportunity to demonstrate suitability
for permanent employment. However, in the absence of bad faith, an
employer is entitled to dismiss a probationary employee without
notice and without giving reasons."
Where the employment of a probationary employee has been
terminated for unsuitability, "the employer's judgment and
discretion in the matter cannot be questioned. All that is required
is that the employer show that it acted fairly in determining
whether the probationary employee was suitable and that he/she was
given a fair opportunity to demonstrate his/her ability."
The Divisional Court therefore overturned the trial judge,
finding that there was an error in failing to enforce the clear
terms of the employment contract that the plaintiff had signed that
made reference to a probationary period of 6 months. While the
plaintiff, subjectively, may have believed that the employer would
find him to be a suitable employee, a reasonable person in those
circumstances would also have understood that that might not
Justice Sanderson summed up the nature of probationary
employment as follows: "probationary employment, on its face
and by its nature, is inconsistent with any inducement or promise
of long-term employment."
On the facts of the case, the employer properly and in good
faith applied the suitability test. The appeal was allowed, and the
plaintiff's lawsuit against the employer was dismissed.
All members of the workforce — both employers and
employees alike — ought to be made aware of this case, as it
is the latest pronouncement on employment rights in the context of
a probation period.
Often employers mistakenly believe that they can terminate
at-will during the probation period. While they certainly have more
freedom to do so without risk of financial consequence, they still
must appropriately consider the suitability of the employee, in
good faith, and give a fair opportunity to the employee to
demonstrate his or her ability.
Written employment contracts should clearly set out a period of
probation, if applicable. Employees should be made aware at the
outset what the probation term refers to in order to avoid any
subjective assumptions by prospective employees that the probation
period is merely a formality, without any real significance. Had
that been done in the case at bar, arguably, expensive and
time-consuming litigation could have been avoided.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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