PROBATIONARY EMPLOYEES – EMPLOYER’S RIGHTS

February 22, 2017

Nagribianko v. Select Wine Merchants Ltd. 2016 ONSC 490 (Div. Ct.)

In my practice I am often asked by my employer clients about their obligations to employees who are dismissed during their probationary period.  This recent case from the Ontario Divisional Court attempts to make things clear.

The employee in this case was dismissed shortly before his 6 month probationary period (which specified in his written employment agreement) had expired. The employer determined that he was “unsuitable for regular employment”. He successfully sued for wrongful dismissal in the Small Claims Court and was awarded 4 months’ salary and benefits. On appeal, however, the Divisional Court set aside the judgment and in so doing stated:

  • The terms of the employment contract had to be interpreted objectively. In other words, “the question the Court should ask is what reasonable persons in the same circumstances as the parties understood the contract to mean”. (In this case the trial judge was incorrect when he found  that the probationary clause of the contract was not clear)
  • “The nature of the employment relationship during the probation is tentative…Probation is a testing period for the employer to assess a probationary employee’s suitability.”
  • “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.

The decision seems fairly clear and is helpful, but consider the following.
First, an issue that does not appear to have been raised in this case is whether or not the employer was still obligated to pay termination pay to the employee in accordance with the Employment Standards Act, 2000 (the “ESA”).  In my view, unless the ESA regulations exempt that employee from the termination pay, there probably is such an obligation in these circumstances. The ESA (which prohibits the parties from contracting out of its minimum standards) contains a provision that if an employee is continuously employed for 3 months or more, there is an obligation to give notice of termination.
Second, the decision does not define “fair opportunity” or “bad faith”.
Finally, the Court gives no guidance on what, if any, consequences the employer faces if it does not give the employee fair opportunity or acts in bad faith during the probationary period. 

Jeffrey A.L. Kriwetz
E-mail: jkriwetz@garfinkle.com
Direct Line: 416.869.7618

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