An employee probationary period is a time-limited trial period set out in the employment contract during which a new employee's job performance is evaluated, typically against prescribed criteria, that may or may not be set out in the employment contract. If the employee satisfactorily completes the probationary period, the employment contract typically graduates the new employee to a permanent position. However, if the employee does not satisfactorily complete the probationary period, the employer may terminate the new employee without further consequences.
Nevertheless, given that employee probationary periods are a contractual construct, they may well be subject to overriding legal considerations, such as employment standards legislation. In most Canadian jurisdictions, the applicable employment standards legislation establishes a period of continuous employment after which a new employee is entitled to termination notice or termination pay in lieu of notice. For example, 90 days in Alberta (section 55(2)(b) of the Alberta Employment Standards Code); 3 months in British Columbia (section 63(1) of the British Columbia Employment Standards Act); 3 months in Ontario (section 54 of the Ontario Employment Standards Act, 2000).
Employers also need to be cognizant of human rights and common law principles with respect to the application of employee probationary periods, especially where they have actively induced a new employee to leave an existing job to begin working for a new employer.
Employers also need to be careful that other provisions in the employment contract do not create assurances or other inconsistent obligations on the part of the employer, which could effectively negate the effect of the employee probationary provision, thereby rendering it legally unenforceable.
As such, it is important that employee probationary periods are carefully drafted in employment contracts and proper consideration is required where an employer does trigger the termination provision pursuant to the probationary language, such that the employer is in compliance with the applicable law and limits its potential legal exposure for having terminated the new employee who believes that they were not given a fair chance to succeed at their new employment or otherwise feels wronged by their early termination.
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