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Arbitrator Upholds Probationary Termination: Key Lessons for Employers
Probationary employment is one of the most important tools employers have to evaluate new hires, but it is often misunderstood and mishandled. While a probationary period gives employers flexibility to assess suitability, that discretion is not unlimited. Decisions made arbitrarily, in bad faith, or without proper documentation can still lead to grievances, wrongful dismissal claims, or costly litigation.
A 2025 arbitration decision offers a timely reminder of these principles. In York University v. CUPE Local 1356-01, an arbitrator upheld an employer’s decision to terminate a probationary employee for unsuitability.
The outcome reinforces that employers must act fairly, in good faith, and without discrimination, and that documentation and communication remain key to a defensible termination.
Case Overview: Termination During Probation Upheld
A security employee was hired on a probationary basis. During that period:
- She unsuccessfully applied for internal promotions and later alleged the process was biased.
- The employer extended her probation, citing ongoing concerns about professionalism and workplace behaviour.
- A complaint was filed by a colleague alleging that she was creating a toxic and disruptive work environment.
- When invited to a fact-finding meeting, she responded with hostility and refused to cooperate.
The employer ultimately terminated her employment, citing unsuitability. The union grieved the decision, claiming the dismissal was arbitrary, discriminatory, and in bad faith.
Arbitrator’s Decision: Broad Discretion, But Not Unlimited Power
The arbitrator dismissed the grievance and upheld the termination, confirming several key legal principles that apply to probationary employment in Canada:
1. Employers Have Broad Discretion During Probation
Probationary periods are designed to allow employers to evaluate whether a new hire is suitable for the position. However, this discretion is not absolute; it must be exercised honestly, fairly, and without discrimination.
2. Documentation Is Your Strongest Defence
The employer’s decision was supported by clear documentation of feedback, coaching, meetings, and workplace concerns. These records demonstrated that the termination was based on genuine, evidence-backed concerns rather than arbitrary decision-making.
3. Allegations of Discrimination Must Be Handled Properly
The arbitrator rejected claims of discrimination, noting that performance issues existed before the allegations were raised and that another successful candidate was a woman. This highlights the importance of investigating complaints seriously while continuing to manage performance objectively.
4. Behaviour and Attitude Are Part of “Suitability”
Probation is about more than technical performance. The arbitrator emphasized that cooperation, professionalism, and behaviour are critical to determining whether an employee is a good fit. Hostility or refusal to cooperate during an investigation can support a finding of unsuitability.
As Christopher Achkar, employment lawyer and founder of Achkar Law, explains:
“Probationary periods give employers flexibility, but that flexibility must be exercised carefully and in good faith. The right legal guidance can help ensure your decisions remain fair, defensible, and compliant with the law.”
Practical Lessons for Employers
While this decision arose from a unionized workplace, the same principles apply broadly in both unionized and non-unionized settings across Canada. Courts and arbitrators alike will scrutinize how a probationary termination was handled.
Here’s what employers should keep in mind:
1. Probation Offers Flexibility, But It’s Not a “Free Pass”
In most jurisdictions, employers can terminate employees during the probationary period without notice or pay if they are found unsuitable. However, this must still be done in good faith and for legitimate reasons. Arbitrary or discriminatory decisions remain vulnerable to legal challenge.
2. Keep Clear and Consistent Records
Documentation is critical. Keep records of feedback sessions, performance meetings, and any behavioural concerns. Consistent documentation not only supports your decision but also demonstrates procedural fairness.
3. Address Complaints and Performance Separately
If an employee raises allegations of discrimination or bias, investigate thoroughly, but do not let those complaints derail objective performance management. Keeping these processes separate helps demonstrate that termination decisions were based on suitability, not retaliation.
4. Remember That Conduct Counts
Suitability encompasses more than just technical performance. Attitude, teamwork, communication, and professionalism are all legitimate considerations. Document behavioural issues with specific examples.
5. Understand the Unionized vs. Non-Unionized Standards
- Unionized environments: Arbitrators assess whether the termination was arbitrary, discriminatory, or in bad faith.
- Non-unionized environments: Courts focus on whether the employer acted honestly, fairly, and reasonably. Even within probation, good faith remains a legal requirement.
Best Practices for Managing Probationary Employment
A proactive approach to probationary periods can significantly reduce the risk of disputes and litigation.
Consider these best practices:
- Set clear expectations from the outset and provide written job descriptions.
- Offer regular feedback and document all coaching or performance discussions.
- Conduct formal reviews before the probation period ends.
- Avoid “rubber-stamping” terminations; ensure the decision is supported by evidence.
- Seek legal advice if complaints, human rights issues, or potential claims are raised.
Final Takeaway
Probationary employment offers employers flexibility, but it is not a shield from legal risk. Decisions must always be fair, evidence-based, and free of discrimination.
The 2025 arbitration decision is a powerful reminder that documentation, professionalism, and good faith are your strongest safeguards and that proactive legal guidance can prevent small problems from turning into costly disputes.
Take Control of Probationary Terminations Before They Become Legal Risks
Probationary periods are valuable tools, but they can quickly become legal minefields if mishandled.
A poorly documented or unfair termination can lead to grievances, wrongful dismissal claims, or reputational harm.
At Achkar Law, we help employers across Canada:
- Draft clear and enforceable probationary clauses
- Implement structured performance management and documentation processes
- Conduct internal investigations that withstand legal scrutiny
- Respond strategically to grievances, complaints, or legal claims
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©