The Dangers of Probationary Periods

Employers – you should  have a probationary clause that is clear, unambiguous and you must ensure the employee understands it.  You should also never agree to a contract until you get a signature on it. The case below is about a person that claimed he was offered a job by telephone before he signed a contract of employment. He argued that there was no probationary period discussed when the conversation took place. Krzysztof Rejdak sought damages arising from the termination of his employment with The Fight Network (TFN).  Mr. Rejdak claimed that his employment was wrongfully terminated and sought compensation in lieu of reasonable notice.  He also claimed unpaid wages. TFN claims that it was entitled to dismiss Mr. Rejdak without prior notice because his employment was terminated before the end of the probationary period.

ISSUES IN THIS CASE
The plaintiff’s submission was that the probationary period does not apply.  He maintained that he entered into an employment agreement with TFN during the course of a telephone conversation: he was offered the job and accepted it; no mention was made of a probationary period at that time. In the result, he submitted that the common law applied so that he is entitled to compensation in lieu of reasonable notice. TFN’s position was that there was no contract between the parties until they signed a written employment agreement a few days after the telephone conversation.  That agreement included a three-month probationary period.

The issues for the Judge to decide were therefore:


THE PLAYOUT
After a few calls and an editing test, TFN called Mr. Rejdak on August 5th 2005.  Mr. Rejdak claimed that Mr. Sobie offered him a job at TFN and he accepted it.  TFN claims that no offer was made that evening.  Rather, TFN’s position was that Mr. Sobie asked Mr. Rejdak to come to TFN’s office to discuss a contract.  On the morning of Monday, August 8, 2005, Mr. Rejdak resigned from his current position.  He then went to TFN’s office.  Later that day, Mr. Rejdak met with Mr. Garrow and Mr. Sobie and was given an employment agreement.  He took the employment agreement home and returned it signed the next day, Tuesday, August 9, 2005.   Mr. Rejdak continued to be employed at TFN throughout the rest of August and September.  During this time period, TFN was preparing to go on air.  TFN went on air on September 21, 2005.  Mr. Rejdak was then dismissed from his employment on Wednesday, October 26 2005. At the time of trial Mr. Rejdak had not been employed other than brief employment teaching martial arts.

WAS THERE AN EMPLOYMENT CONTRACT?
Mr. Rejdak was interviewed on Wednesday, August 3, 2005.  He completed work on a promotional tape in the afternoon of Friday, August 5, 2008.  Mr. Sobie and Mr. Garrow from TFN both reviewed the tape and responded favourably to Mr. Rejdak’s work.  Mr. Garrow testified that he told Mr. Rejdak that Friday afternoon that, if he was interested in the job at TFN, TFN would put together an offer, that is, a contract for him to be employed as an editor and creative director.  Mr. Rejdak mentioned salary and Mr. Garrow said that they were looking at something around $50,000. The Judge concluded that Mr. Rejdak believed that there was a deal on Friday evening and that the parties had agreed on title, salary and start date. Were it otherwise, Mr. Rejdak would not have resigned his long term job on the Monday morning.  Based on testimony, the Judge conclude that there was an oral employment contract entered into by the parties on Friday evening, August 5.

IF THERE WAS AN EMPLOYMENT CONTRACT, WAS IT VARIED BY THE WRITTEN AGREEMENT?
On August 8, 2005, Mr. Rejdak was presented with a written employment agreement.  That agreement provided for a three-month probationary period.  Did that written employment agreement vary or supersede the contract that Mr. Rejdak and TFN had entered into on August 5? TFN submited that, even if there was a prior oral agreement, it was superseded by the subsequent written employment agreement.   The Judge was satisfied that Mr. Rejdak understood the key terms of the agreement when he signed it.  If he had any concerns, he did not raise those concerns with either Mr. Garrow or Mr. Sobie. Mr. Rejdak said that he felt that he had no choice but to sign the agreement, having already given up his job at The Score. Mr. Rejdak’s position was that the written employment agreement was of no force or effect because there was no fresh consideration.  TFN’s position was that there was fresh consideration: Mr. Rejdak was to receive two weeks’ vacation and a benefits. The Judge did not accept this. He did not accept that either benefit constitutes additional consideration.  The paid vacation merely reflects the two-week statutory minimum.  Mr. Rejdak would reasonably have expected to receive the health benefit plan since it was a standard benefit provided to all TFN employees. The Judge concluded that the written employment agreement did not supersede the oral agreement.  It was of no force or effect.  The agreement did not provide fresh consideration and, in the circumstances, Mr. Rejdak had no choice but to sign it.

WHAT IS THE APPROPRIATE NOTICE PERIOD?
Mr. Rejdak submits that the appropriate notice period is nine months.  He maintains that he should receive a notice period at the maximum end of the range given the circumstances of the case.  TFN’s position is that the appropriate notice period, if any, is one to two months.  Naturally, the Judge noted that the determination of a reasonable notice period is case-specific.

Mr. Rejdak was 37 years of age.  He is highly skilled in his field of editing for television: he has both an educational background (3-year program in film and television; and a 9-month program in non-linear editing) and job experience in the field (seven years as a post-production editor at The Score and freelance work). Mr. Rejdak has not found a job in his field.  He said that he believes this is because it is a narrow field.  Mr. Rejdak said that his period of unemployment has had a severe impact on his physical and psychological health.  He did not receive his Record of Employment for some time and therefore could not get employment insurance.  He testified that he could not afford to pay for various medical treatments that he needed.

While Mr. Rejdak did not claim that he was enticed to take the job at TFN, he submitted that one of the factors to be considered is that he left a secure job to take the job. The Judge noted the case of  Oakley v. Astra Pyrotechnics Canada Ltd. (1989), 18 A.C.W.S. (3d) 426 (Ont. Dist. Ct.), “the plaintiff was dismissed without cause after thirty-one days of employment.  One of the factors that Salhany D.C.J. considered in determining a notice period of four months was that the plaintiff left a job of sixteen years to take this job.  In that case, the court was satisfied that the plaintiff was led to believe that as long as she lived up to her represented ability, she had a permanent job.”

The Judge also noted the case of Pollock v. Patrick Cotter Architect Inc., [2005] B.C.J. No. 2851 (B.C.S.C.), “where the plaintiff left a secure job to work for the defendant company.  She was dismissed after five months due to organizational changes.  The court held that the proper period of notice should depend on the parties’ reasonable expectations at the time the contract was made.  In this case, it found that an assurance that the job would not change in the immediate future was implicit in the offer of employment.  In the result, the plaintiff was entitled to five months’ notice.”

The Judge also noted the case of Leonard v. Wilson reflex, (1992), 41 C.C.E.L. 226 (O.C.J. – Gen. Div.). The plaintiff left a five-year job to join a new enterprise, a riding school.  She was not enticed.  She knew it was a new business.  She was dismissed after four and a half months’ employment.  In deciding that the minimum reasonable notice period was six months, Austin J. considered the fact that the plaintiff had left a secure, long-term position to join the defendant.

Mr. Rejdak had been employed for about seven years at The Score when he left to take a job at TFN.  He was highly skilled in his field.  He was employed at TFN for less than three months.  While he ought to have known that accepting the job was risky given that TFN was a start-up venture, his dismissal was not related to this factor.  While TFN did not induce Mr. Rejdak to join TFN, the fact that he left secure employment to take the job and that TFN was aware of this is a factor in determining the appropriate period of notice. Having considered these factors, it was the Judge’s opinion that four months is a reasonable period of notice.

DID THE PLAINTIFF MITIGATE?
The burden of proof is on the employer to establish that the employee failed to take steps to mitigate and that, had the employee taken these steps, he or she would likely have obtained comparable alternate employment during the notice period.  The question was therefore has TFN satisfied this burden of proof? Based on the evidence, the judge could not conclude that Mr. Rejdak failed to mitigate.

CONCLUSION
The Judge concluded that there was an employment contract when TFN offered Mr. Rejdak a position on the telephone the evening of August 5, 2005 and Mr. Rejdak accepted it.  This contract was not varied by the subsequent written employment agreement because, in the circumstances, Mr. Rejdak had no choice but to sign the agreement. Mr. Rejdak was entitled to compensation in lieu of reasonable notice.  I conclude that reasonable notice in the circumstances of this case is four months.  or $16,666.67 (based on an annual salary of $50,000).