THE EMPLOYERS' EDGE
Short Service Employees May Not Truly be “Probationary”
We often hear clients talk about their “probationary employees”. More times than not, however, we have to deliver the bad news that the employer did not create an enforceable probation period as a term of employment when they hired the employee. Unlike the unionized world where collective agreements almost always contain probationary language, non- union employees are not subject to an automatic probation period. Absent an express term in an employment agreement or a well communicated workplace policy, non-union employees with less than three months’ service are entitled to common law notice of dismissal even where provincial employment standards statutes may not require the employer to pay statutory termination pay.
We have blogged previously about the value of employment agreements for non-union employees. One of the benefits of a written contract or a hiring letter is that the employer can include specific language about the probationary status of the employee that includes the length of the probation period, the right to extend the probationary period if the employer needs more time to assess the employee’s suitability and the employer’s notice obligations if the employee is dismissed during the probation period.
While the CCP team always recommends written employment agreements or hiring letters as a “best practice”, a workplace policy confirming a probation period can also be relied on to demonstrate that the employee is, in fact, on probation during the first 3 or 6 months of their employment. It is important to ensure that the employee reads and acknowledges the policy before they start working. While many employers have probation policies, these are often not presented or communicated to the employee until after they start working. This can be problematic from an enforceability standpoint so if an employer wants to rely on a policy it is critical that the policy be provided to the employee before they start so the employee is aware of the probation status and can’t later say that it wasn’t part of the “bargain” they agreed to when becoming an employee.
The potential liability for not having a probation clause in an employment agreement or policy can be substantial. Depending on the employee’s position and whether the employee was hired away from secure employment, dismissing in the first three months can often cost an employer more than a dismissal after a year or two from a common law perspective.
The lawyers at CCP can assist employers in drafting effective probationary language for employment contracts and hiring letters as well as provide advice on potential liability when an employer decides to exit a short service employee where there is no probation clause.
Please Note: This blog has been prepared as an informational service for our clients and other interested parties. It is not intended to constitute legal advice, a complete statement of the law or opinion on any subject. Although we endeavour to ensure the accuracy of the content, no one should act upon the information provided without a thorough examination of the law after the facts of a specific situation are fully considered.