Law Times

Page 8 OCTOBeR 16, 2017 • LaW TIMeS www.lawtimesnews.com Decision focuses on probationary employees BY MICHAEL MCKIERNAN For Law Times A Court of Appeal deci- sion offers important lessons for both proba- tionary employees and their employers, according to the lawyers who argued the case. In Nagribianko v. Select Wine Merchants Ltd., a unani- mous three-judge panel of the province's top court sided with the employer, which had fired its employee Alexander Nagrib- ianko toward the end of an agreed six-month probationary period. Nagribianko had initially won common law damages equal to four months' salary and benefits at Small Claims Court, only to see the award overturned at the Divisional Court. Although the text of Ontar- io's Employment Standards Act makes no mention of probation- ary periods, the appeal court noted that the concept "has ac- quired a clear meaning at com- mon law." "The decision recognizes that probationary employment is fundamentally different from regular employment. A pro- bationary term is intended to ascertain whether a settled and continuing relationship is likely to work out," says Gavin Mac- Kenzie, who acted for Select Wine at the divisional and ap- peal courts. MacKenzie, co-founder of Toronto litigation boutique MacKenzie Barristers LLP, says the decision clears up linger- ing confusion about the sta- tus of probationary employees by confirming that, "unlike a regular employee, a probation- ary employee may be dismissed without cause and without no- tice during the probationary period," so long as the employer acts in good faith and gives the employee a chance to show suit- ability for the job. Despite the setback at the province's top court, Nagribi- anko's lawyer, Howard Markow- itz, says he took solace from the appeal court's recognition that probationary employees are still entitled to ESA minimum termination pay, even without a reference to the law in the em- ployment contract. In Nagribianko's case, his ESA-prescribed entitlement was one week's severance pay, since he had spent more than three months but less than two years in the job. Markowitz, a partner at To- ronto employment law firm Du Markowitz LLP, also acted for his client at the Small Claims Court trial. He says he didn't charge him for the subsequent appeals "be- cause I believed on principle that it was necessary to uphold the right of all employees, even those on probation, to minimal [ESA] termination pay." The case dates back to May 2013, when Nagribianko left his job to join Select Wine's alcohol import agency. A week short of the expiry of the probationary period, the company terminated his em- ployment, claiming that, after "careful consideration," it had concluded he was "unsuitable for regular employment" due to a key customer's refusal to deal with Nagribianko. Nagribianko sued for wrong- ful dismissal in Small Claims Court, where a deputy judge agreed that the probation clause in the contract, which simply stated "probation . . . six months," was unenforceable, in part because he was never given a copy of the employee hand- book, which spelled out the em- ployer's right to fire him during the six-month period. The trial judge then award- ed him common law damages amounting to four months of salary and benefits, after finding Nagribianko had been induced to leave his previous stable em- ployment for a shot at a new job with greater responsibility and possible advancement. However, the Divisional Court overturned the decision in a 2016 ruling. The court found that Nagrib- ianko had demonstrated an un- derstanding of what probation- ary periods entail, as well as their inherent instability. In the appeal court's June 27 decision upholding the Divi- sional Court decision, the three judges wrote that the short pro- bation clause was unambiguous and enforceable. "Unless the employment con- tract specifies otherwise, pro- bationary status enables an em- ployee to be terminated without notice during the probationary period if the employer makes a good faith determination that the employee is unsuitable for permanent employment, and provided the probationary em- ployee was given a fair and rea- sonable opportunity to demon- strate their suitability," the deci- sion reads. Jeff Dutton, the principal at Toronto firm Dutton Employ- ment Law, says the decision sets a "low bar" for the enforcement of a probation clause, but he adds that he would still advise employers to include more detail about the term in employment contracts. "I had expected they might come down on the side of the employee due to the fact there was some ambiguity about the length of the probationary pe- riod," he says. Jonathan Borrelli, a manage- ment-side employment lawyer, says he was pleasantly surprised by the appeal court's employer- friendly interpretation of the term "probation" in the employ- ment contract, relying on an ob- jective assessment of the parties' intentions, rather than the em- ployee's subjective understand- ing. "The Court of Appeal tells us that this is a standard defini- tion that has been around for more than 20 years, and that any reasonable person would understand what it means," says Borrelli, who practises with Toronto-based DMC LLP, a law firm focused on serving dental practices. LT FOCUS ON Labour & Employment Law Jeff Dutton advises employ- ers to include details about probationary period terms in employment contracts. 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