Summary
A recent Ontario Small Claims Court decision serves as an important reminder that a probationary period does not necessarily provide an employer with the unfettered ability to terminate an employee without consequence – especially if they have not been provided with a reasonable opportunity to demonstrate their suitability. This decision also provides helpful guidance on how employers can use probationary periods effectively while reducing risk, including through the use of valid and enforceable termination provisions.
The Facts
In Yadav v Ahangama, 2026 CanLII 48313 (ON SCSM), the plaintiff was hired as a full-time law clerk. The offer letter stated that the position was conditional on the successful completion of an initial probationary period of three months, during which time the plaintiff’s performance would be reviewed.
The employer hired the plaintiff despite it being clear from their resume that they did not meet the experience requirements as outlined in the job posting (2-5 years of experience). The employer also did not verify any of the information contained in the plaintiff’s resume with their former employers.
The employer dismissed the plaintiff without cause after ten days of employment, once it became apparent to the employer that the plaintiff could not manage a file on their own. The plaintiff commenced an action in Small Claims Court, seeking damages for, among other things, wrongful dismissal.
The Decision
At trial, the employer advanced the argument that because the plaintiff was a probationary employee, they were at liberty to fire them at any time without cause and without notice or pay in lieu.
The Court rejected the employer’s position, relying on established case law including the Ontario Court of Appeal’s leading case with respect to probationary employees. In Nagribianko v. Select Wine Merchants Ltd., 2017 ONCA 540, the Court of Appeal confirmed that probationary employment may permit termination without notice, or pay in lieu of notice, only where the employer makes a good faith assessment that the employee is unsuitable for permanent employment and the employee has been given a fair and reasonable opportunity to demonstrate suitability.
The Court found that the dismissal of the plaintiff after only ten days did not provide them with that opportunity. As a result, the Court determined the plaintiff had been wrongfully dismissed. Given the absence of enforceable termination provisions in the employment agreement, the plaintiff was entitled to common law reasonable notice. The plaintiff was ultimately awarded three months’ pay in lieu of notice.
In reaching this decision, the Court additionally cited the recent decision in Liivam v MacKay Contracting Ltd., 2025 BCSC 582, as describing what is required in engaging in a good faith assessment of a probationary employee, including outlining the following principles:
- The standard is not just cause: An employer only needs to establish that it acted in good faith in assessing the suitability of a probationary employee;
- Explain how the employee will be assessed: The employee must be made aware of the basis for the suitability assessment (this must occur either before or at the commencement of employment). An employer may be able to meet this requirement by adequately explaining expectations in terms of performance and job skills from the outset and the standard to which the employee will be measured in terms of their suitability for the position.
- Provide a reasonable opportunity: The employee must be given a reasonable opportunity to demonstrate suitability. There is no bright line test respecting what amounts to a “reasonable opportunity” and it may vary depending on the nature of the position and other relevant circumstances.
- Fairness in the assessment: The employer must act fairly and with reasonable diligence in assessing suitability and making a decision respecting the probationary employee’s continued employment.
The Court found it relevant that the plaintiff had not been given any feedback about their performance in the ten days prior to their termination, notwithstanding that the employment contract specifically provided that their performance would be reviewed during the probationary period. The Court further noted that the uncontradicted evidence was that the plaintiff had been given only one file to handle on their own, was never given any training, and never received any indication or warning that their employment might be terminated.
Takeaways
The decision, and the cases highlighted within, provide a good baseline for employers to follow when dealing with an underperforming probationary employee. It is worth noting that this is a decision of the Small Claims Court and is therefore not binding on the higher courts. However, given the recent shift to a higher monetary threshold ($50,000) and significant delays in the Ontario Superior Court, an increasing number of plaintiffs are electing to bring claims in this forum.
An employer is not required to show misconduct or performance issues rising to the level of just cause respecting probationary employees. However, in order to defend against potential claims, employers should be prepared to show that the termination followed a good faith assessment of the employee’s suitability. Following the principles as outlined in this decision and the cases cited within, including the Liivam decision, provides employers with actionable steps that can be taken, such as setting clear expectations at the outset of employment, providing adequate training and feedback prior to making a decision, and providing a probationary employee with warnings and the opportunity to improve if they are underperforming at an early stage.
This decision serves as a cautionary tale for employers and underscores the importance of engaging in best practices in the hiring, training, and onboarding phases of the employment relationship. The employer in this case hired a candidate without the requisite experience and without verifying the information contained on the resume. Ultimately, this did not alter the Court’s conclusion that the employer had failed to provide the employee with a reasonable opportunity to demonstrate their suitability once they had made the decision to hire them.
This decision further underscores the importance of having enforceable termination provisions contained in a written employment agreement. If the employer in this decision had valid termination provisions limiting entitlement to only the minimum standards provided under the Employment Standards Act, it is possible that the plaintiff would not have been entitled to anything as the statutory termination entitlements only begin after an employee has been continuously employed for three months or more.
Need More Information?
For more information or assistance with labour and employment matters, contact Ryan Parry at rparry@filionlaw.com or your regular lawyer at the firm.