The Utility Of Probationary Periods Called Into Question By Recent BCSC Decision

A new British Columbia Supreme Court decision calls into question whether probationary periods will provide the flexibility and protections they are intended to address. In Ly v. Interior Health Authority, 2017 BCSC 42, the Court concluded that a probationary term contained in the plaintiff's employment contract was valid and enforceable. However, the Court went on to find that the defendant Interior Health Authority had failed to meet its obligation to carry out a good faith assessment of Mr. Ly's suitability for continued employment. Therefore, Mr. Ly was awarded damages in lieu of reasonable notice.

The Probationary Term

Mr. Ly commenced work with the Interior Health Authority on November 6, 2014 as the Manager of Quality and Patient Safety and Client Experience. Prior to commencing employment, he signed an offer letter that included the following provision:

"Employees are required to serve an initial probationary period of six (6) months for new positions."

Mr. Ly was dismissed on January 8, 2015, without notice, during the probationary period.

The plaintiff submitted that the bare reference to probation in his offer of employment was not sufficient to create a valid probationary period. However, the Court concluded that the term probation is well understood in business and industry and determined that as an experienced manager, Mr. Ly understood that it meant a period of assessment during which a new employee's suitability and performance is assessed. The plaintiff also argued that he did not believe the probationary period applied to him, even though the offer letter was specifically addressed to him, and he had reviewed and signed it. However, the court was unsympathetic to this argument, and found that if he thought that was the case, Mr. Ly could have questioned the need for its inclusion or requested that it be removed. The evidence was that he had negotiated other terms of the offer, but chose not to question the probationary period. Therefore, he did not, and could not later, take issue with its applicability.

A question before the Court was whether employers could have probationary periods longer than three months, without breaching the British Columbia Employment Standards Act (the "ESA"). The Court was clear that the statutory entitlements found in section 63(1) of the ESA (termination notice/pay) could not be circumvented or breached by the terms of probation. In this case, the Court concluded that the probationary period...