Probationary Periods and Benefits Waiting Periods

What you should know

2 min read

Most of us are familiar with probationary periods. A probationary period is the period of employment during which an employee can be dismissed without cause, and without notice or pay in lieu of notice. Many employers put new hires on probation to protect themselves, and ensure they’ve really found the right fit. Employers often set the same period of time as a waiting period before employees become eligible for their benefit plan.

The Legal Picture

There are rules under employment standards legislation that determine maximum probationary periods within each province.  As of June 1, 2018, that period in Saskatchewan is 13 weeks.  Note that this may be amended from time to time — check Labour Standards for your province for updates.

Employers who hire on a probationary basis limit their legal commitments to new employees during that period.  Following this period, the employee may be offered a permanent position.  It is important for employers to handle the employment process properly to limit the risk of liability and grievances.

Why Probationary Periods are a Good Idea

The Probationary period makes sense when hiring as it provides both the employer and the employee a chance to ensure that it is a good fit for both. Employee probations allow for human error when hiring, and give employers a chance to see the new hire actually working in the position – something they can’t determine in an interview.

Employees in the probationary period may be terminated at any time during the period, and they are not entitled to notice or pay in lieu of notice.

Putting the Probationary Period in Writing

Employers are advised to have a written probationary employment contract that specifies that the employment is probationary, the duration of the probation, that the employee may be terminated at any time during the period if it is determined they are not suitable for the job, and specify the criteria by which the employee will be judged.

To terminate a probationary employee, the employer only needs to find them unsuitable in some specific categories.  This differs from terminating a permanent employee without notice where the employer needs just cause.

What about Benefits?

When it comes to employee benefits and probationary periods, employers have flexibility. Many employers choose to not offer benefits until the probationary period is complete, and some may wait even longer to start providing benefits.  Delaying this offer can provide administrative and cost benefits; however, companies should also consider what makes them attractive as an employer. Potential hires will likely be taking the group benefits offer, and any waiting periods into consideration when deciding whether to accept a position.

For those employers who hire on a probationary basis, we suggest they examine their process, policies, and paperwork closely to avoid legal issues.  A discussion with a Human Resource specialist or an employment lawyer can help them get appropriate information.

If you need help determining waiting periods for your employee benefits, talk to us.