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The Power of the Probationary Period

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power of the probationary period
Perhaps the best weapon in an employer’s arsenal to screen applicants is the probation period. In my experience, it is also one of the least used and least understood.

The probation period can be viewed, if used correctly, as one long audition for a job. In revealing an individual’s true skills and attitude, it far surpasses any interviewing technique, new or old. There is no substitute for viewing an individual on the job in real work situations.

Legally, the impact of the probation period amounts to one thing only – a reduced standard of just cause for summary dismissal. It allows the employer, temporarily, to take advantage of a much more forgiving just cause threshold when deciding to summarily dismiss an employee. However, employers should be mindful that the legal onus is still on it to justify the summary dismissal of a probationary employee (just as it is in the case of a regular employee).

The common law provides employers with the ability to hire an employee on probation. This is only true, however, if certain steps are taken by the employer to properly establish the probation period. The probation period does not, contrary to what seems to be a widely held belief, arise unless it is properly brought into effect by the party who will later seek to obtain the benefit of its use.

It is especially important for employers to properly document and implement probation terms because of the way courts treat dismissed short-term employees. Court awards indicate that employees with a short period of service (up to about 2 years) tend to receive disproportionately high damages for wrongful dismissal. Awards in the range of 6-12 months of pay are no longer uncommon.

Employers often lean on the provisions of the B.C. Employment Standards Act when imposing initial probation periods. The Act impliedly supports such a concept, stating that no notice or severance pay is required for an employee who has worked less than three months.

But the Act is not the only legal authority when it comes to the obligation to provide working notice or severance pay. The common law of employment implies a term that, unless just cause exists, reasonable working notice of termination (or pay in lieu) must be provided. There is no implied exception to this rule for so-called probationary employees.

There is even less of a legal basis for presuming that a probationary period automatically arises later in the employment relationship (such as after a promotion or a transfer). In those circumstances, neither the common law nor the Act provide support for the existence of a probation period. And, an employer’s unilateral imposition of a probation period can even amount to a constructive dismissal.

Employers should also be aware that a probation “policy” will not necessarily bind the employee. If the policy is not made a binding element of the employment contract, it will be of little value. As a result, the employer and employee should agree, in writing, prior to the commencement of the employment, on the terms of a binding probationary period.

If the parties do agree on a probationary period, they should define what the standard of review will be (the most common standard is suitability). They should then go a step further and set out the various criteria on which the employee will be measured during the probation period.

Common law decisions indicate that employers must apply objective criteria in performing a good faith assessment of the probationary employee. And, the employer’s conclusions must, always, be reasonable in the circumstances.

The probation terms should clearly identify the length of the period and should provide the employer with an additional period of time, after the expiry of the probation, to review the employee’s performance and make a decision. This protects the employer against a finding that the employee has reverted to regular status and can no longer be dismissed using the lower standard.

Documentation should be kept, during the probation period, of the employee’s progress in relation to the agreed-upon criteria. The employer should be pro-active in counseling the employer on her shortcomings. Specific instructions should be provided on achieving the desired standard and the employer should provide its assistance. These are important elements in demonstrating the employee has been given a reasonable opportunity to meet the employer’s standards of conduct and performance.

An employer following all these steps will find itself in an excellent position to defend against wrongful dismissal claims by dismissed probationary employee. Those who choose to ignore these requirements will find themselves in court wondering why they didn’t do the job properly to begin with.

These items are intended for general informational purposes only and should not be construed or relied upon as legal advice. The legal issues addressed in these items are subject to changes in the applicable law. You should always seek competent legal advice concerning any specific issues affecting you or your business.

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