How does a probationary period work in Ontario?
Written by For Founders Law, a Toronto firm licensed by the Law Society of Ontario. About us
Short answer
Ontario's Employment Standards Act doesn't define probation, but it doesn't require termination notice or pay for an employee employed less than three months. Beyond the ESA, a probationary period only limits what you owe at common law if a signed employment agreement says so clearly, before the employee starts. Even then, you must assess the employee's suitability in good faith, and human rights law applies throughout.
A probationary period is a common feature of startup offer letters. What it achieves depends on two separate sources of law: the ESA minimums, and the common law notice an employee is otherwise owed.
What does the ESA say?
Under the Employment Standards Act, 2000, an employer doesn’t have to give notice of termination or termination pay to an employee who has been continuously employed for less than three months. That’s true whether or not the contract mentions probation. Once an employee passes three months, ESA notice applies, even if their contract says probation lasts six months. See the ESA guide on termination.
What does the contract add?
| Contract says | Ending employment in the first months, without cause |
|---|---|
| Nothing about probation, and no valid termination clause | The employee may be owed reasonable notice at common law, even after a short time |
| A clear probation clause, signed before the start date | Usually limits what’s owed to the ESA minimum during probation, if the clause is drafted carefully |
| Probation longer than three months | ESA notice still applies after three months; the clause can’t reduce it |
A probation clause has to be part of the agreement the employee signed before starting. Adding one after they start may need fresh consideration.
Can I end employment for any reason during probation?
No. Courts have said an employer must assess suitability fairly and in good faith during probation, though the standard is lower than just cause. And it’s illegal to end employment for a reason connected to a protected ground under Ontario’s Human Rights Code, such as disability, pregnancy or family status, or as reprisal for asserting ESA rights (ESA, s. 74).
How long should probation be?
Three months lines up with the ESA. Some employers use six months for senior roles, but after three months the ESA minimums apply anyway, so a longer period mainly affects common law entitlements. Extending probation after the fact is risky. If the agreement doesn’t expressly allow an extension, a court may not give effect to one the employer imposes on its own, so get the employee’s written agreement before the original period ends, and remember the ESA notice rules apply after three months regardless.
What should a probation clause say?
- The length of the probationary period.
- That the company will assess the employee’s suitability during it.
- What the employee receives if employment ends during probation: at least the ESA minimum, in every circumstance.
- That it works together with an ESA-compliant termination clause. See what a termination clause must say in Ontario.
What to do next
Our employment agreement template includes probation and termination terms written for the ESA, at a fixed fee on our fees page. See also your first hire in Ontario.
This guide is general information about Ontario law, not legal advice for your situation. If you’re deciding whether to end someone’s employment during probation, book a free 15-minute consult.