Termination during a Probationary Period
According to the BC Employment Standards Act, an employee who is terminated without cause is entitled to severance pay or a period of notice based on their years of service. The Act specifically provides that Employees in their first three months of employment can be terminated with or without cause at any time, and without severance. Most employers consider this to be a three month probation period during which the Employee’s suitability for continued employment will be assessed.
In addition, many employers will include a probationary period of a similar nature into a written employment contract. Although such a provision will typically be enforceable, it will not give the employer carte blanche to fire at will. The law in British Columbia has developed so as to place an obligation on the employer who terminates during a probation period to do so in good faith. In the recent case of Ly v. British Columbia (Interior Health Authority), the BC Supreme Court set out requirements placed on an employer who chooses to terminate during a period of probation. In tis case, the plaintiff was hired in a managerial role and was terminated after approximately two months of employment. The court set out the following factors to be considered in determining whether the termination was made in good faith.
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 his 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, even though the employee was terminated during the probationary period, the court found that they were entitled to reasonable notice damages because the employer had not provided the employee with a fair opportunity to demonstrate their suitability.
Before terminating an employee during a probationary period, it is important that the employer turn their mind to the above principles, as failure to do so could result in a court award made against the employer. Similarly, for employees, the mere fact that the termination took place during a probationary period will not necessarily bar a claim for reasonable notice damages.
Should you need any assistance with this area, or have further questions, please contact us. We are here to help you navigate tricky situations such as these ones and get you the best possible outcome.