Probation Periods in Employment Agreements
As an employment lawyer, I regularly assist employees across Ontario in reviewing and negotiating employment agreements (sometimes called “employment contracts“), including when it comes to a probation period. One of the best decisions any employee can make is to have an experienced employment lawyer review the terms and conditions of employment agreements. As the old saying goes: “before you sign that contract, make sure you read the fine print and know exactly what you’re getting yourself into.” Why?
Because an employment lawyer can help you better understand what you are agreeing to; how they will impact your rights in the future (especially the value of your severance package if your employment is terminated); and, quite often, help advise you on how to request changes or help negotiate with the employer on your behalf. Some of the most contentious parts of employment agreements include:
- probation periods
- termination clause
- non-solicitation clause
- confidentiality and intellectual property clause
In this article, we will focus on a probation period clause.
What is a Probation Period under Ontario Employment Law?
When it comes to a probation period, the idea is to allow both the employer and employee to get to know each other before embarking on a longer-term commitment. However, practically speaking, it benefits employers more than employees because it gives an employer an opportunity to evaluate a new employee during the early days of the employment relationship.
This way, if they determine early on that things that the employee is not “working out” or “not suitable for the job,” it can dismiss the employee before the probation period expires and not have to give the employee prior notice of the dismissal, establish that it had “just cause” for dismissal, or provide the employee with severance pay (financial compensation) as part of a severance package that would otherwise be required.
In Ontario, the Employment Standards Act, 2000 (“ESA“) establishes the rules when it comes to probation periods, including how long an employee’s probation period can last in order to comply with the law. Specifically, the ESA says that an employer does not have to give an employee notice (or pay in lieu of notice) if it terminates the employee’s period of employment within the first 3 months. So, generally speaking, an Ontario employee’s probation period period refers to the first 3 months of an employee’s job during which an employee can assess an employee’s suitability as a permanent employee.
Can an Employer Require a Probation Period Longer than 3 Months?
Yes. In fact, sometimes a probation last more than 3 months in an employment contract, which is legal. However, if an employer decides to fire an employee after 3 months, they must still provide the employee with their minimum entitlement to notice of termination, or termination pay in lieu of notice. Generally, this means an employer must provide the employee with at least 1 week of notice (or pay in lieu for termination) per year of service for termination of the employment contract.
On the other hand, if an employment contract does not include a probation period, an employer generally cannot decide to then unilaterally place an employee on a probation after they have already started working (or otherwise extend a fixed probation period). In such cases, an employee is protected by “reasonable notice of termination” under common law that applies automatically, which typically entitles the employee to considerably more notice of termination (or pay in lieu of notice). Therefore, employers who wish to limit an employee’s severance pay entitlements upon termination to only the ESA minimums should have an experienced employment lawyer prepare an employment contract that complies with the ESA.
Contact Employment Lawyer Today
If you are an employer who would like to prepare prepare employment agreements that include a probation period, or if you are an employee with questions about your probationary status or believe you have a wrongful dismissal claim following a termination of employment, or who would like understand your legal rights and ability to claim for wrongful dismissal or negotiate your employer’s severance package, contact our employment law firm to speak with a top wrongful dismissal lawyer for help. Contact our experienced employment lawyer by phone 647-822-5492 or fill out the contact form to the side. We would be happy to assist in your employment law matter as quickly as possible.
Disclaimer: The content on this website and blog is not legal advice or legal opinion of any kind, and is only to provide general information. It is in no way particular to your individual case and should not be relied upon in any way. The outcome of a legal matter depends on its unique circumstances, and prior successes are not indicative of future results. No portion or use of this website or blog will establish a lawyer-client relationship with the author, this law firm or any related party. Should you require legal advice for your particular situation, please fill out the form below, or call 647-822-5492, to request an initial consultation.
Employment Lawyer in Toronto | Wrongful Dismissal Lawyer | Employment Law Firm in Toronto | Employment Lawyer in Ontario | Severance Package Lawyer