Common Law Entitlements for Employees Under Three Months or on Probation in Ontario

What Employers and Employees Often Get Wrong

In Ontario, it is widely assumed that employees with less than three months of service, or those described as being on probation, have no legal entitlement if they are terminated. This assumption is incorrect. While the Employment Standards Act, 2000 sets minimum statutory thresholds, it does not eliminate an employer’s obligations under the common law.

Statutory Minimums vs Common Law Rights

Under the Employment Standards Act, an employee who has worked less than three months is generally not entitled to statutory notice of termination or termination pay. This statutory rule is often misunderstood as giving employers an unrestricted right to terminate new employees without consequence.

The ESA establishes minimum standards only. It does not displace the common law. Unless there is a valid and enforceable employment contract that clearly limits notice entitlements, an employee may still be entitled to reasonable notice at common law, even with very short service.

Probation Does Not Mean “No Rights”

Probationary status does not automatically strip an employee of common law protections. In Ontario, probation is a contractual concept, not a statutory one. Its legal effect depends entirely on how it is drafted and applied.

To rely on probation to limit notice obligations, an employer must have a clear and enforceable probationary clause that complies with the ESA. Clauses that purport to allow termination without notice or cause, even during probation, are often found unenforceable if they conflict with statutory standards or are ambiguously drafted.

Where a probation clause is invalid, the employee is treated like any other non-fixed-term employee and may be entitled to common law reasonable notice.

The Common Law Test During Probation

Even where a probationary period is valid, employers do not have unfettered discretion to terminate. At common law, probation allows an employer to assess suitability for permanent employment. Termination during probation must be based on a good faith assessment of suitability and the employee must be given a fair opportunity to demonstrate competence.

Probation is not a licence to terminate arbitrarily, for improper reasons, or without meaningful evaluation. Allegations of misconduct, dishonesty, or serious wrongdoing during probation attract a higher evidentiary burden and often undermine reliance on probation altogether.

Reasonable Notice for Short-Service Employees

Ontario courts have repeatedly confirmed that employees with less than three months of service may still be entitled to reasonable notice at common law. Reasonable notice is assessed contextually, taking into account factors such as the employee’s age, position, level of responsibility, compensation, and the circumstances of dismissal.

In practice, courts have awarded notice periods of several months to employees with only weeks or a few months of service, particularly where the role was senior, specialized, or induced from prior employment.

Short service does not mean nominal notice. It simply means that length of service is one factor among many.

Benefits and Compensation During the Notice Period

Where common law notice applies, the employee is entitled to be placed in the same financial position they would have been in had proper notice been given. This includes salary, benefits, bonuses, and other components of compensation that would have accrued during the notice period.

An employer cannot rely on short service or probation to deny benefits continuation where common law notice is owed.

What This Means for Employers

For employers, terminating employees under three months or on probation still requires legal analysis. Assumptions based solely on ESA thresholds or probation labels can lead to wrongful dismissal claims.

Employers should ensure that probationary clauses are carefully drafted, ESA-compliant, and consistently applied, and that termination decisions are supported by documented, good faith assessments.

What This Means for Employees

For employees, being new or on probation does not mean you are without rights. If you are terminated early in your employment, the key questions are whether your contract lawfully limits notice and whether the employer acted in good faith.

Where a probation clause is invalid or misused, employees may be entitled to reasonable notice and damages despite very short service.

Closing Thoughts

Common law protections do not disappear during the first three months of employment. Probation affects how performance is assessed, not whether legal obligations exist.

Both employers and employees benefit from understanding that early termination is not risk-free and not rights-free. Clear contracts, fair assessment, and informed legal advice remain essential, even at the very start of the employment relationship.