THE EMPLOYERS' EDGE
Ten Days’ Work for Three Months’ Pay – A Lousy Deal For the Employer
In Ontario, employees with less than three (3) months of service typically do not qualify for statutory notice of termination under the Employment Standards Act, 2000. However, an employee’s right to common law reasonable notice, even for an employee with ten (10) days of service, is not automatically rebutted, unless an employment agreement effectively limits the employee’s termination entitlements.
A recent decision from the Ontario Small Claims Court, Yadav v Ahangama, is a good reminder that probationary periods do not give employers unlimited discretion to terminate employees without risk.
What Happened?
The employee, a law clerk, was hired by a law firm pursuant to an employment agreement which did not contain a termination provision. Rather, the agreement contained a probation clause which provided that that the employee’s employment was “conditional on the successful completion of an initial probationary period of three (3) months, during which time [the employee’s] performance will be reviewed.”
Ten (10) days into the employment relationship, the employee’s employment was terminated without cause. The employee commenced an action for wrongful dismissal against the employer seeking, among other things, damages for common law reasonable notice. The employer argued that the probationary clause allowed them to terminate the employee’s employment at any point during the three (3) months’ probation period without cause, notice, or pay in lieu.
The Court sided with the employee and held that:
- ‘Probationary status’ does not strip an employee of all protections: the employer must still act in good faith and give a fair and reasonable opportunity to demonstrate suitability; and
- The absence of any express termination clause in the employment agreement meant that the common-law framework of reasonable notice continued to apply, subject only to the modified test for probationary employees.
The Court’s analysis reinforced that the employee was not given any real opportunity to succeed in the role. There was little evidence that the employer provided the employee with any meaningful feedback, training, or performance discussions before the termination decision was made. As a result, the Court awarded the employee damages equal to three (3) months’ notice, despite the employee’s short tenure of ten (10) days.
Takeaways for Employers
1-Good Employment Contracts Still Matter
This case is yet another reminder of the importance of well-drafted termination clauses.
An enforceable termination provision can significantly reduce an employer’s exposure when ending employment relationships, especially early on.
2-Probationary Periods Are Not Bulletproof
Simply calling someone a “probationary employee” does not guarantee that termination will be risk-free. Courts may still look at whether the employer acted fairly and gave the employee a genuine opportunity to demonstrate their suitability for the role.
3-Feedback and Training Matter
This decision suggests that employers should not treat probation as a passive waiting period. If there are concerns about performance or fit, it helps to communicate expectations clearly, provide feedback, and document the process before making a termination decision.
Reach out to myself or the team at CCP for help navigating a termination situation or to review your employment agreements!
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