Obligations to Probationary Employees

Employers have the misperception that probationary employees can be terminated at any time, for any reason, without any obligations or consequences for the employer. A recent British Columbia Supreme Court decision highlights the duties that employers owe to their probationary employees and the liabilities that can result. This case involved the termination of a probationary employee after allegations of off duty misconduct. Within two hours of the allegations being made, and without investigation, the plaintiff was terminated. The employment was remote employment at a mine in Cuba and involved the plaintiff working one month on site and then having one month off work. The court determined that the termination was a wrongful dismissal, and one that was carried out without a proper good faith assessment, and on the basis of accusations that were not investigated. This finding was costly for the employer, resulting in a significant award of damages for failure to provide reasonable notice, as well as an award of $25,000 in aggravated damages and $20,000 in punitive damages.

The decision highlighted the differences that apply to the termination of probationary employees. While generally speaking, it is an implied term of any employment contract that an employer may terminate an employee either for just cause or by providing reasonable notice, this principle operates differently when an employee is within their probationary period. For probationary employees, the implied right to terminate requires an employer to act in good faith in the assessment of the probationary employee’s suitability for a permanent position. In determining whether the employer has acted in good faith, courts have examined the process through which the employer determines whether the employee is suitable for permanent employment. The factors will be considered by the court to determine whether a good faith assessment was made include:

1. Whether the probationary employee was made aware of the basis for the employer’s assessment of suitability before, or at the commencement of employment;
2. Whether the employer acted fairly and with reasonable diligence in assessing suitability;
3. Whether the employee was given a reasonable opportunity to demonstrate suitability for the position; and
4. Whether the employer’s decision was based on an honest, fair and reasonable assessment of the suitability of the employee, including not only job skills and performance but also character, judgment, compatibility and reliability.

In this case, the trial judge found that the termination was due to the allegations of misconduct and that the allegations made against the plaintiff are the sort of allegations which required the employer to seek a response from the plaintiff prior to acting.  The trial judge concluded that the plaintiff was not given a proper assessment of his suitability and was wrongfully dismissed.  Notice of 4 ½ months was awarded for the wrongful dismissal.

An award of aggravated damages in the amount of $25,000 was made due to the actions of the employer after the termination, which required the plaintiff to remain in a hotel in Cuba while refusing to tell him why, telling him that there were concerns about his safety and that if he left the hotel he may be arrested and warning the plaintiff about issues with the secret police. The court also relied on the fact that all of these actions took place in Cuba which was a country that was new to the plaintiff with unknown standards of conduct for law enforcement. The court accepted the plaintiff’s evidence that all of this conduct caused him significant stress and mental strain and that this distress was above and beyond the normal mental distress that arises from a termination. The court also found that this behaviour was egregious enough that it should also amount to a further denunciation by the court in the form of punitive damages. The court characterized the conduct as high-handed and malicious and made a further award of $20,000 in punitive damages. 

Having an employee on a probationary period of employment does not provide the opportunity for the employer to terminate without assessing the suitability of the employee, and does not insulate the employer from obligations or potential liability. Placing employees on a probationary period of employment imposes an obligation on the employer to engage in a good faith assessment of the employee’s suitability for employment. A failure to engage in this good faith assessment exposes the employer to potential significant liability and censure by the court.

If you have questions about this topic or any other workplace law issues, feel free to contact Rose Keith* or any member of our Workplace Law team. You can also stay informed by exploring our most recent blog posts here.