Terminations during the Probationary Period: Three Common Assumptions

Many employers like to take the first few months of a new employee’s employment to decide whether their new hire is the right addition to the team.   Some like to call it a probation, others, a trial or evaluation period. Irrespective of what it is called I have noticed three recurring assumptions about this initial period that are worthy of attention by both employees and employers.   Employers relying on these assumptions may believe themselves better protected against claims for payment of reasonable notice than may in fact be the case. Employees for their part may assume that they have no recourse following a termination during their probation period which again, may not always hold true.

Assumption #1 – An employer can automatically terminate an employee during the first three (3) months of employment without providing the employee notice or pay in lieu.

The right to terminate without notice during the probation period is not automatic. Although the Employment Standards Act, 2000 (“ESA”) stipulates that an employee who is terminated within the first three (3) months of their employment is not entitled to notice or pay in lieu, a court will not simply infer that the employee has agreed to these terms.   Justice Lederman in Easton v. Wilmslow Properties Corp [2001] O.J. No 447 reasoned:

The existence of a probation period is a question of fact in each case. Since it takes away an employee’s usual rights, a probationary period must be expressly agreed to by the employee. It cannot be implied into the relationship…

Assumption #2 – In the absence of a clear probationary period clause, the amount of notice that a short service employee is entitled to receive is necessarily very minimal.  

Some employees who have had their employment terminated within the probation period (and who did not have enforceable probation clauses in their contracts) have been awarded some relatively lengthy notice periods. To give three examples: In the case of Easton, the plaintiff who was terminated after two weeks was awarded three (3) months’ notice because she had left a reasonably secure job to work for the defendant employer.   Likewise, in the case of Rejdak v.The Flight Network, the employee was awarded four (4) months of notice after eleven (11) weeks of work.   Similarly in Deacon v Moxey, 2013 CanLII 54099 (ON SCSM) the employee was awarded three (3) months of notice after working two (2) weeks.

Assumption #3Extending a probation period provides the employer a longer period within which they can terminate the employee without notice.

While an employer can stipulate a longer probation period (i.e. 6 months) in an employment contract, this does not automatically extend the window that an employer can terminate the employee without notice or pay in lieu. Employers will want to ensure that the probation clause is drafted to ensure that there are no violations of the ESA.

Whether you are an employee or an employer, if you have questions about drafting or the enforcement of a probation clause our employment lawyers would be pleased to assist.

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Lawyers “Feed the Hungry” Program- Why We Support The Ottawa Mission

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Today, myself and most of the staff here at Mann & Partners, LLP are volunteering our time to serve dinner at the Ottawa Mission as participants in the Ottawa Lawyers Feed the Hungry Program.  Various law firms in the Ottawa area rotate to provide meal service once a month, providing over 5,000 meals a year. We are so fortunate to have such an incredible program in Ottawa.

Working in Employment Litigation, I see the devastating effects that unemployment can have on a family. I am proud to support the Ottawa Mission, which assists those who are homeless by offering a variety of services, from providing food and shelter to addictions counseling and medical care, to education support and job training for those looking for help finding employment. There are a number of other incredible, free programs in the city who suffer from lack of employment, such as the Causway Work Centre, Young Parent Employment Program, Ottawa Works ServicesOttawa Employment Services Centre, Ottawa Community Coalition for Literacy and more.

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The Mission Blog explains the support services that they provide for those looking to get back into the workforce:

Most of the people who come to The Ottawa Mission have no desire to spend time at a homeless shelter.  They are just like you and me – they have families, and have had homes and jobs in the past.  The difference is that circumstances in their lives have left many of them sick and hurting − without a home, without work, without hope.   Their priority is to get their life back on track – and that means getting the help they need and, when they are able, finding a job.

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The Ottawa Mission has a number of programs to support people who are homeless or at risk of homelessness who want to rejoin the workforce.  Our Client Services Centre offers phone and computer access and workshops on resume writing.  The Stepping Stones Learning Centre has a full-time teacher who helps people upgrade their education – working on-line to achieve a high school diploma, or accessing college and university courses.  Our 5-month Food Services Training Program gives people the opportunity to gain valuable skills working with professional staff in our kitchen. Many graduates have gone on to pursue careers in the food services industry.

The latest program to be introduced at The Mission is the Custodial Skills Training Program.  Developed in 2012 in partnership with the City of Ottawa and the Ottawa Catholic School Board, this 8-week program includes classroom and on-the-job training. The first class wrapped up in March, and we are pleased to announce that 13 of the 15 students are now employed.

The success of the first Custodial Training Program session speaks for itself.  It has given thirteen people renewed hope – and a chance at a better life.

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To learn more about the Ottawa Mission’s Education, Job Training and Client Services, visit: http://ottawamission.com/how-we-help/education-job-training-client-services/

To make a donation now, visit: https://ottawamission.com/make-donation/

Colleen Hoey is an Ottawa-based lawyer practicing in the areas of Employment Law, Human Rights Law, and Civil Litigation at Mann & Partners, LLP. The articles on this blog are not intended to provide legal advice. Should you require legal advice, please contact Mann & Partners, LLP at 613-722-1500 or fill out our form to be contacted within 24 hours.

Employee’s Duty to Mitigate Damages

It is a general principle of employment law that an employee who is terminated from employment is required to make reasonable efforts to find other sources of income or “mitigate their damages”. Generally, income that is earned by an employee after he or she is terminated from employment during a reasonable notice period is deducted from any award of damages in a wrongful dismissal case.

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In a decision released in June this year, Bowes v. Goss Power Products Ltd. (2012 ONCA 424), the Ontario Court of Appeal considered the application of this principle of mitigation where an employment contract provided a fixed amount of severance upon termination. Peter Bowes entered into an employment agreement with Goss Power Products. The contract provided that if he were terminated without cause, he was entitled to six months of notice or pay in lieu of notice. Following his termination without cause, however, the employer learned that he secured other employment and refused to pay the full six months of severance on the grounds that Mr. Bowes had successfully mitigated his losses by finding other work.

Mr. Bowes sued for the full six month payment without any deductions for amount earned from other employment during the six month period.  The application judge accepted the employer’s argument and held the general duty to mitigate damages applied. In doing so, he equated the fixed notice period (or pay in lieu) stipulated in the contract to damages at common law for reasonable notice which is subject to the duty to mitigate. Since the contract was silent on the issue of mitigation, the application judge held that the duty to mitigate applied and if the parties had intended to remove the employee’s obligation to mitigate that should have been set out in the contract. Therefore, the application judge concluded that Mr. Bowes had mitigated his losses by finding other employment and was not entitled to the full 6-month payment as set out by the contract. Bowes appealed the decision.

The Ontario Court of Appeal disagreed with the application judge and concluded that Bowes was entitled to the full six month payment. The Court held that where an employment agreement stipulates a fixed term of notice or payment in lieu there is no obligation on the employee to mitigate his or her damages, unless the contract clearly and specifically indicates otherwise.  In making this conclusion, the Court of Appeal made three key findings:

(1)          A fixed term of notice or payment in lieu is not equivalent to common law damages for reasonable notice (the parties negotiated something different);

(2)          Payment in lieu of a fixed term of notice, being liquidated damages or a contractual amount, is not subject to the duty to mitigate; and

(3)          The employers concerns regarding an employee’s “golden parachute” or any potential unfairness to the employer was without merit. The Court stated: “A contract is a contract, and it is expected that it will be honoured.”

In summary, the Court of Appeal held that where an employment agreement contains a stipulated entitlement on termination without cause, the amount in question is either liquidated damages or a contractual sum. Either way, mitigation is irrelevant and an employee in this situation is not required to mitigate his or her damages. Where an employer seeks to have mitigation apply in a contract specifying a fixed amount upon termination without cause, clear and specific language contractual language is necessary.

Colleen Hoey is an Ottawa-based lawyer practicing in the areas of Employment Law, Human Rights Law, and Civil Litigation at Mann & Partners, LLP. The articles on this blog are not intended to provide legal advice. Should you require legal advice, please contact Mann & Partners, LLP at 613-722-1500 or fill out our form to be contacted within 24 hours.