Employment Contracts in Canada: What is a probationary period?

What is a probationary period

Employment Contracts in Canada: What is a probationary period?

A probationary period is a period of time within the first three months of an employment relationship where the employer can evaluate the new hire to be certain they are the right fit for the job. Within this term, the employer is allowed to terminate the employee without termination notice.

A probationary period is not mandatory and cannot always be enforced. The Employment Standards Act (ESA) does not outline it as a necessary order. The employer may include a probationary period clause in their employment contract if they decide it is reasonable for their employment relationship(s).

Rules When Instituting the Clause

The probationary clause cannot be implied, it must be explicitly stated in the Employment Contract to take effect. If the employer does not include this clause in the Employment Contract, the employee is required to receive termination notice upon dismissal, regardless of whether the termination is within the first three months of their employment.

Even though the probationary period is not outlined in the ESA, the employer must still follow its criterion. An employer cannot impose a probationary period clause if its conditions are below the required minimums laid out in the ESA. The ESA states that after being employed for more than three months, all employees are eligible for termination notice. Thus, an employer may not terminate an employee without notice if they have worked longer than three months, even if the Employment Contract outlines a probationary period longer than this timeframe.

How the Employer Must Respond

When terminating an employee within a probationary period, the employer must reasonably evaluate whether the employee’s skill and character compliments the job. This evaluation is measured on a scale based on the employee’s suitability for the role. This process must be fair for the employee, meaning they should be given an appropriate amount of time to prove they are adequate for the job.

If you have further questions about implementing a probationary period clause or responding to one, please contact KCY at LAW by filling in an online consultation request or contact us by phone at 905-639-0999 to book your consultation today.