A probationary period is a period of time at the beginning of the employment relationship for both the employer and the employee to evaluate whether the position is a good match for the employee.
Normally, employers can terminate employees for any reason, as long as it’s not discriminatory and they pay severance. When correctly done, a probationary period allows employers to let employees go without paying severance — as long as they determine that the role was not a good fit.
In my employment practice, I often get questions about probation periods from people who are starting a new job, but have misconceptions about this opening phase. Here are the top five myths about probationary periods that I hear as an employment lawyer.
Myth: Probationary periods are automatic
Fact: Your employment is only subject to a probationary period if you agree to one and sign an agreement that specifically states that your employment is subject to a probationary period.
The law does not automatically impose a particular probationary period. In order for an employer to terminate an employee during a probationary period without paying severance, they must have an employment contract that both states your employment is subject to a probationary period and that if you are let go during your probationary period, the employer does not need to pay you severance.
READ MORE: What you need to know before you sign a contract — even if your employer asks you to
If you do not sign an employment contract before starting your new job, your employment is not subject to a probationary period. You would be owed severance even if you are let go a day into your new job.
Myth: Probationary periods can last up to six months
Fact: Probationary periods longer than three months are meaningless, because the employer will still have to pay you severance after three months.
While your contract may specify three months of probation, the employer’s ability to terminate your employment without paying severance is, by law, limited to a three-month period.
An employer can only terminate an employee without paying them severance if they have an enforceable probation clause and they let the employee go within the first three months of employment.
If you signed a contract with a proper probation clause and you are let go the day after your three months is over, you are owed full severance pay. A full severance package can be as much as 24 months’ pay.
READ MORE: The 5 facts you need to know about severance pay, according to an employment lawyer
Myth: My employer can extend my probationary period
Fact: Extending a probationary period beyond the three-month limit is pointless, because an employer will still have to pay you severance after three months.
Employers often try to extend the probationary period when they are unsure whether an employee is a good fit. But you are still owed severance if you are terminated beyond the three-month limit.
Myth: Employers can put long-serving employees back on probation
Fact: Employers can’t place long-serving employees back on probation and terminate them without paying them severance.
Sometimes employers try this tactic as part of a performance improvement plan, but it has no effect on your severance entitlements. Employers cannot eliminate your years of service. Once you have worked past three months, you are entitled to severance based on your full term of service to a company.
Myth: You can be terminated during your probationary period without reason
Fact: An employer can only let someone go during the probation period without paying severance if the employer has objectively determined that the employee is not a good fit for the position.
The purpose of probation is to provide the employee with an evaluation period to determine their suitability for the role. The employee must be given ample opportunity to demonstrate their suitability, and the employer must evaluate them objectively. For instance, an employer cannot let you go just before your probation period expires because they don’t want to pay commissions that are due to you.
I recommend that employees refuse a probationary period clause in their employment agreement under certain circumstances, such as when you leave a secured job to join another company.
READ MORE: The top 5 termination myths — and what you need to know about being fired from a job
In this case, you’d want to avoid subjecting yourself to a probationary period to make sure that you get severance if you’re let go.
Employees who have been let go within the first three months are often unaware that they could be owed up to four months of severance.
If you’ve been terminated during your probationary period, it is crucial that you have your situation reviewed by an employment lawyer, like the team at Samfiru Tumarkin LLP, to ensure that your employer is paying you what you are legally owed.
Have you been let go from your job? Are you trying to properly calculate the amount of severance pay owed to you?
Contact the firm or call 1-855-821-5900 to secure assistance from an employment lawyer in Ontario, British Columbia or Alberta. Get the advice you need — and the compensation you deserve.
Mackenzie Irwin is an employment lawyer and partner at Samfiru Tumarkin LLP, Canada’s most positively reviewed law firm specializing in employment law and long-term disability claims. The firm provides free advice on Canada’s only Employment Law Show on TV and radio.