Under section 54 of the Employment Standards Act 2000 (“ESA”) an employee who has been employed for less than three (3) months can be terminated without statutory notice or pay in lieu of notice. It is also the period normally used by employers as “probationary” for new employees.
Recently, the Superior Court of Justice Ottawa Small Claims Court’s decision of Barton v Bowerman, 2016 CanLII 30100 (ON SCSM) discussed the impact of termination during a probationary period of six (6) months’.
The plaintiff, Ms. Nancy Barton (the “plaintiff”) brought a claim against the defendants, Jack R. Bowerman, CA-Professional Corporation and Mr. Jack R. Bowerman (collectively the “defendants”) for wrongful dismissal and claiming that she was entitled to six (6) months’ salary.
The plaintiff was hired as an Executive Assistant to Mr. Bowerman and worked for approximately two (2) weeks. The defendants posted a job seeking an executive assistant with general administrative duties and did not call for any specific skills or education in accounting. The plaintiff sent her resume to the defendants, which included extensive experience in financial administration and secretarial skills. After the plaintiff was interviewed, the defendants sent the plaintiff two (2) documents entitled: (1) administrative duties; and (2) employment contract. The employment contract stipulated that there was to be a six (6) month probationary period. The employment contract also “specifically provided “during the probationary period – termination by either party – will be in accordance with the Employment Standards Act.” (para 4).
During the first week of the plaintiff’s employment with the defendants Mr. Browerman noted that the plaintiff was having difficulties keeping up with the volume of work required to fulfill her duties. Mr. Browerman informed the plaintiff after the first week that he had noticed her shortcomings and indicated that he was hoping to see her improve on her meeting the requirements of the job. During the second week of the plaintiff’s employment, she continued to fall short of completing her employment duties. The defendants terminated the plaintiff at the end of her second week of employment and provided her with an additional two (2) week lump sum payment as well as all outstanding wages from the two (2) weeks of employment.
The issues for the Court to consider were as follows:
- whether the plaintiff was entitled to any notice;
- whether the minimum standard under the ESA apply to the plaintiff; and
- whether the six (6) months’ probation period was intended to completely contract our of s. 54 of the ESA.
DECISION OF THE SUPERIOR COURT OF JUSTICE OTTAWA SMALL CLAIMS COURT
The plaintiff submitted that she was entitled to the entirety of the six (6) months of salary representing the probationary period of the contract. The Court however disagreed, noting first that “[w]ith any probationary period, both parties assume the risk that the relationship will not work out resulting in a termination of that relationship.” (para 15). The Court also noted that it is for the employer during a probationary period to decide whether or not an employee is suitable for the position in which they were hired. The Court did find that there is a presumption of reasonable notice, but it can be rebutted if the employment contract plainly specifies a different notice period, which is agreed by both parties.
As noted above, section 54 of the ESA states that “no employer shall terminate the employment of an employee who has been continuously employed for three months or more unless the employer, (a) has given to the employee written notice of termination in accordance with section 57 or 58 and the notice has expired; or (b) has complied with section 61.” (para 17). The Court then noted that because the plaintiff had not been employed continuously for three (3) months or more, the minimum standards of the ESA do not come into play. However, in assessing the employment contract at hand the Court held that the probationary period provision was not trying to, strictly speaking, contract out of the effects of section 57 of the ESA. Meaning, under section 57 of the ESA the plaintiff is entitled to “one week’s pay in lieu of notice given her employment was less than one year.” (para 18). However, the Court also considered the common law jurisprudence in light of the Bardal factors. Ultimately the Court concluded that the defendants’ offer of two weeks’ pay in lieu of notice, which the plaintiff refused, was reasonable.
Although the above case can be seen as a victory for employers, it should be advised that if an employment contract does not clearly state the probationary period and does not comply with the ESA, an employee may be entitled to the same reasonable notice period that an employee not otherwise on probation would be entitled to. Meaning that an employer may be obligated to pay a considerable amount in lieu of reasonable notice regardless if the termination happening before the expiry of the probationary period is up. It is advisable that an employee be aware of their entitlements even during the probationary period.
Similarly, a recent Divisional Court decision in Nagribianko v. Select Wine Merchants Ltd., 2016 ONSC 490, also noted that the idea of dismissal at the end of a clearly defined probationary period for unsuitability as the standard rather than just cause. The Court stated that ““Probationary employment, on its face and by its nature, is inconsistent with any inducement or promise of long-term employment. In this case the employer properly and in good faith applied the suitability test.” (paras. 43 and 44). Further, this case confirmed that “[i]n interpreting a contract, the question the Court should ask is what reasonable persons in the same circumstances as the parties would have understood the contract to mean. The subjective intentions of the parties are irrelevant.” (para 28). For a more detailed discuss of Nagribianko v. Select Wine Merchants Ltd., please see: http://www.advocatedaily.com/arthur-zeilikman-contracts-for-probationary-employees-are-enforceable.html