What is a Probationary Period?
A probationary period allows the employer to evaluate a new employee during the early days of the employment relationship. If things aren’t working out from an employer’s perspective, they can dismiss the employee before the probationary period expires. This probationary period ensures the employer does not have to provide advanced notice of the dismissal or establish that it had “just cause” to justify the dismissal.
In Ontario, a probationary period is typically three months, which allows employers to assess a new employee’s suitability for the job, and during this time, the employer can terminate without notice or severance.
This aligns with the Employment Standards Act’s termination provisions, which state that an employer is not required to provide notice or termination pay if an employee has been employed for less than three months.
Is it Legal to Extend Probationary Periods?
An employer may wish to extend a probationary period if an employee’s performance is not yet meeting expectations, but shows potential for improvement.
However, if an employer can legally extend the probationary period, it depends on certain key factors:
- Employment Contract Provisions: The employment contract should clearly outline the original probationary period and whether it can be extended. If the contract allows for an extension, the employer must follow the process outlined in the agreement.
- Employee Consent: Employers must communicate with the employee in writing and obtain their agreement on the extension of a probationary period. Employers cannot unilaterally extend a probationary period without the employee’s consent.
Working for Workers Four Act, 2024 (Bill 149)
- Additionally, employers must be aware of the new amendments to Bill 149 which have expanded the definition of an “employee” under the ESA to now include workers performing work as part of a “trial or probation period.”
- The law considers anyone working during a probation period as an employee, which includes short-term arrangements where employers ‘test out’ a potential new staff member.
For further discussion on recent changes to the Working for Workers Act, see this article
Best Practices for Employers
To mitigate legal risks, employers should follow best practices when implementing or extending probationary periods:
- Draft Clear Employment Contracts: Clearly define the probationary period, conditions for extension, and termination terms in employment contracts.
- Document Performance Evaluations: Regularly assess and document employee performance to provide a rationale for any extension requests when needed.
- Obtain Employee Agreement in Writing: Ensure that any probation extension is documented and agreed to by both parties.
- Consult Legal Counsel: If you are uncertain about extending a probationary period, speak with an Emerge Law counsel to seek legal advice to ensure compliance with Ontario employment law.
Key Takeaways
- Probationary periods in Ontario typically last three months, during which employers can terminate without notice or severance under the Employment Standards Act (ESA).
- Employers can extend a probationary period only with clear contractual provisions and the employee’s written consent.
- Under Bill 149 (Working for Workers Four Act, 2024), workers in probationary periods are now considered employees under the ESA and are entitled to relevant protections.
Thank you to Fotini Sioukas for her contribution to this article. The contents of this article are not to be construed as legal advice. Contact Emerge Law’s lawyers for legal assistance.