There's No Probationary Period for New Employees Unless Expressly Agreed by Contract
Probationary periods are common but not automatic. If it isn't expressly agreed by contract, the law will not presume any period of probation for new employees.
Reasonable Notice
The law presumes that employees who are hired to work for an indefinite duration must be provided with “reasonable notice” of dismissal.
This reasonable notice standard varies from case to case. In general, longer-serving employees are entitled to more notice than shorter-serving employees. But even very short-term employees may be entitled to several months of termination notice.
Probation
Employers can contract out of the presumption of reasonable notice for short term employees by imposing a probationary period. Since it takes away an employee’s usual rights, a probationary period must be expressly agreed to by the employee. It cannot be implied into the relationship.
An employer can obtain the employee’s agreement by simply putting a probation clause into its written offer of employment. So, while probationary periods are very common, they are not automatic.
An employee leaving secure employment to join a new employer should consider negotiating the removal of any probation clause from an offer of employment. Probationary employment is said to be inconsistent with any inducement or promise of long-term employment. As such, the presence of a probation clause will undermine the expectations of secure employment which an employee might form during the hiring process.
Probation is a testing period for the employer to assess a probationary employee's suitability. Suitability includes considerations of the probationary employee's character, ability to work with others, and ability to meet the employer's present and future standards.
But the employer must act in good faith and give a probationary employee a fair opportunity to demonstrate suitability for permanent employment. However, in the absence of bad faith, the employer's judgment and discretion regarding the employee’s suitability cannot be questioned.
Employment Standards
The Employment Standards Act, 2000 (the “ESA”), establishes minimum employment standards for employees. Among other entitlements, the Act provides for minimum notice of termination (or termination pay instead). Under the Act, employees who have only worked less than three months are not entitled to notice of termination.
Many people mistake this for a mandatory three month probation period. That is not correct. The ESA establishes minimum standards only. While employees with less than three months’ service are not guaranteed any notice of termination under the ESA, employees may still be entitled to more than the minimum notice under their employment contracts. In fact, despite anything in the ESA, the default presumption remains that an employee will be entitled to “reasonable notice,” unless their employment contract validly says otherwise.
As long as an employer respects minimum standards, the employer can theoretically negotiate a probation clause of any duration. With the right contractual language, an employer is also able to limit notice of termination to only the ESA minimum at all times during an employee’s tenure. In that case, an explicit probation clause would be redundant.
While the default legal presumption is that even very short-term employees are entitled to “reasonable notice” of termination, employees and employers can carefully negotiate to modify that presumption, as long as their agreement complies with all minimum employment standards.
