Probation is not a licence to arbitrarily fire a new employee
By Howard Levitt
When after only two weeks, David Dubeta, proprietor of Dubeta Interiors, found that his new manager, Shtabsky, was too brusque and ruthless in his handling of employees, he quickly fired him.
Despite his short service, the court awarded Shtabsky 12 months’ severance. Employees who are fired even before their first day of work have been awarded as much as six months’ pay.
What are the lessons?
First, there is no necessary linkage between length of service and wrongful dismissal entitlement. Second, there is no inherent concept of probation.
To engage an employee on probation, the letter of offer or employment contract must specify precisely that.
But what most employers (and employees) understand by “probation” has little to do with the law.
Contrary to what most people understand it to be, probation is not a licence to dismiss employees with impunity. An employee who is hired explicitly on probation cannot be fired with cause, unless they demonstrate a lack of suitability for their function. Probation, legally, is intended to provide an employee an opportunity to demonstrate that they can do the job. If they can demonstrate that, there is no cause to fire them (although cause is measured with less stringent standards than for regular employees).
Beyond the lower standards for cause, a wrongfully dismissed employee on probation will recover less severance than an equally short-service employee who is not on probation.
What about those employers who wish to create the right to arbitrarily fire employees on probation for no reason, or any reason, at all, and not pay any compensation?
Such a client wrote to me last week:
“Hi Howard, Currently, our employment contracts simply say ‘There is a 90-day probationary period.’ I would like to update them as follows: ‘Your employment is subject to a three (3) month probationary period. The probationary period is expected to provide a reasonable time frame to determine your suitability as a permanent employee for the role, including but not limited to assessment of demonstrated job skills, adherence to company policies, efficiency and output, ability to follow direction, and the ability to work in harmony with others.”
My response was: “That clause will cause you endless difficulties. Here is what the clause should say: ‘The first three months of employment will be probationary during which you can be terminated, with or without cause, without notice, termination pay, severance pay or wrongful dismissal damages, at management’s sole discretion, without recourse on your part of any kind.’ “
What employers want is the right to fire employees on probation for any reason — or none. If they decide the employee isn’t needed, lacks the skills or they simply have a bad sense about him, they want to terminate, pay nothing and not be concerned further. But the language my client proposed would have accomplished precisely the opposite. It would require the employer to have to prove the employer objectively evaluated the employee on their job skills, ability to work in harmony with others and the various other criteria that that clause delineated. If they couldn’t prove that, the employee would have a good claim for wrongful dismissal. But having to prove all that is precisely the opposite of what employers want in having an employee on probation. The language I proposed permits the employer to fire the employee without pay or recourse, in clear, uncomplicated terms — which no employee could argue that they failed to understand.
Another client last week asked about extending probation. That can be done, if (a) the employee agrees to it, (b) it is done before the probation expires, and (c) unlike in the first three-month probationary period, the extended probationary clause provides at least the minimum employment standards minimum.
The mistake implicit in the clause my client had proposed is similar to that at the heart of many company mission statements. People drafting these policy statements — with promulgations as to respect in the workplace, equality of opportunity, a positive working environment and such — rarely consider them written contracts permitting the employee to sue if those “goals” are not realized. In addition, they become the standards by which judges will view the company’s behaviour in a variety of workplace contexts.
Obviously, every employer wishes to conduct business using honourable mission statements. But they should understand that, once such policies are distributed, every employee has a weapon with which to sue if those objectives are not met.