Probationary periods are often essential tools for both employers and employees to determine the viability of a new employment relationship. In recognition of this, the Employment Standards Act provides for a three-month period in which no minimum notice is required for termination. However, in some professions this period may not be sufficient for the parties to properly assess a new employee's suitability for a position.

Nagribianko v Select Wine Merchants involved a decision by the small claims court of the wrongful dismissal claim of an employee terminated after four months of employment. The parties agreed that the employment contract provided for a probationary period of six months. However, there was disagreement as to what legal effect the probationary period had. The employee handbook, which provided for termination during the probationary period on the minimum entitlements set out in the ESA, was not given to the employee until after he began working for the defendant. As a result, the Deputy Judge found that the defendant could not rely upon the notice limitation clause, and that as a result, the employee was entitled to common law reasonable notice. The trial judge granted an award of four months' notice.

The employer appealed.

The Divisional Court held that a probationary period is a well understood concept. It is a period during which the employer and employee determine whether the employee is suitable for the position. It is understood as a period of minimal job security. During a probationary period, an employer need only act fairly in determining whether an employee is suitable for the position. If they have acted in such a manner, the probationary employee can be dismissed without further notice and without giving reasons.

As a result, a reasonable person in the circumstances of the plaintiff would have understood the risk and less stable employment relationship during a probationary period, even without having seen the employee handbook. On the basis of this understanding, once the employer made the good faith determination that the plaintiff was not suitable for the position, it was entitled to terminate the plaintiff's employment without reasonable notice.

The Court allowed the appeal and overturned the trial verdict, dismissing the employee's claim for any greater amount than that set out in the ESA.

Probationary periods are often valuable tools for employers to determine whether significant hiring decisions are appropriate. Employers would be well advised to assess whether they require longer probationary periods than the three months set out in the Employment Standards Act to assess the suitability of candidates. This case shows that courts will respect probationary periods of reasonable length, and will enforce limitations on employee entitlements for dismissal during such periods, provided statutory minimum requirements are respected.

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