Dental office employers (like other Ontario employers) often put team members on probation for the first 3 months.
The idea was that, if things aren’t working out, the dentist could terminate the team member for NO REASON whatsoever AND ALSO do so IMMEDIATELY and WITHOUT the requirement to give advance notice or pay in lieu of notice. Yup: immediate termination with no additional notice or pay. That’s it. You’re out.
But why 3 months?
Because under the Employment Standards Act, 2000 (the “ESA“), once an employee has been with you for more than 3 months (but less than 1 year), then by law you MUST give them at least one (1) week of notice or pay in lieu thereof if you want to terminate them. Again, you don’t need a reason to terminate them. But you MUST give them notice or pay in lieu of notice and give them all the benefits and entitlements they would have had during the course of that one (1) week.
But this is where things get a little murky.
You see, even if an employee is terminated within the three (3) months for NO REASON whatsoever (i.e. things just don’t work out), the employee can still SUE the employer for wrongful termination under judge-made law (also known as the Common Law). And the common law generally says that an employee is entitled to one (1) month of notice or pay in lieu of notice for every year that they’ve worked. There are cases where judges have awarded employees terminated within those three (3) months with MONTHS of pay when considering all the so-called Bardal factors (the employee’s age, ability to find alternative suitable employment, length of service, and character of employment – nature and level of role – senior vs. junior, specialized vs. general).
So how does a dentist employer get around the Common Law?
Contracting Out of the Common Law (YES YOU CAN!)
You can contract out of the Common Law. Yup. You most certainly can. And judges will allow it. IF… BIG IF… it’s done properly.
And a lot of employers have done it IMPROPERLY to their costly disadvantage.
You see: a dentist employer can hire an employment lawyer to prepare a clearly written employment agreement that, when entered into properly (no duress, undue influence, no unconscionable bargain, etc.) says that the employer may terminate an employee within the first 3 months and would owe them NOTHING because this complies with the ESA AND that the employee agrees that they’re OK with that AND they’re not entitled to their Common Law rights. In other words: the employee is waiving their Common Law entitlements. So yes, an employee can contract out of the Common Law.
Contracting Out of the ESA (NO YOU CAN’T!)
Now there’s the thing get a little tricky (and where employers find out the hard way): you CANNOT contract out of the ESA. The ESA dictates the minimum standards that apply to employment agreements and relations between employer and employee.
So What’s the Problem?
Here’s the problem: if a lawyer representing an employee who’s just been terminated OR a judge scrutinizes your employment contract and finds that there’s an ILLEGAL term or clause in a termination provision, then ALL of the contract’s termination provisions are struck down. Yikes! And if you can’t save it (because judges are reluctant to sever the illegal clause or write the correct words into a contract when it’s deemed illegal), then it’s as if there IS NOT CONTRACT. This means that the Common Law now applies! Even if the employment agreement said that the employee waives their Common Law rights and entitlements! DOUBLE YIKES!
Termination For Cause Clauses: Don’t Do It
So, if you include a probationary clause and it tries, for example, to contract out of the ESA (which is illegal), then the probationary clause fails and the Common Law applies. How do you contract out of the ESA without realizing it? By having something in the employment agreement that says that the employer can terminate the employee if they’ve done something wrong AND THAT SOMETHING is a LOWER standard than what’s in the ESA – that’s how! In that case, ALL termination clauses (yes, even the probationary one) fails! And in that situation: enter the Common Law.
This all stems from the 2020 Waksdale case. That case essentially made A LOT of employment agreements throughout Ontario not worth the paper they were written on because it invalidated ‘without cause’ termination provisions because of illegal ‘for cause’ termination provisions (that weren’t even relied upon!).
Employers found out the hard way that they couldn’t rely on their contracts at all to terminate team members. And employment lawyers went after employers time and time again and extracted large sums of money from them based on the Common Law (because the termination was treated as if there was NEVER any contractual termination clause to begin with!).
The standard for terminating someone for doing something wrong (i.e. for ’cause’) is just too high: the employee’s conduct must have been non-trivial and they must have acted bad on purpose. This is VERY hard to prove. As such, we DO NOT RECOMMEND terminating someone for cause and DO NOT recommend putting language in employment agreements that tries to outline the grounds for terminating someone ‘for cause’. You’re better off just leaving it out and not relying on it and terminating someone by giving them notice or pay in lieu of notice.
The Chan v. NYX Capital Corp Case
Let’s look at a recent Ontario court case where the employer TRIED to rely on a probationary clause in an employment and LOST and had to pay big bucks. In Chan v. NYX Capital Corp., 2025 ONSC 4561, Reginald Chan was hired into a senior-sounding role at a small firm with a written contract that included a three-month probation period and a termination section aimed at limiting the employer’s obligations. NYX terminated him one day before the end of his contractual probationary period.
The employer took the position that it could end the relationship without notice during probation, or at most pay ESA minimums. The court disagreed and awarded three months’ common law notice (about $44,644 plus interest), largely because the termination clause was drafted in a way that unlawfully tried to contract out of ESA protections. WOWZA!
Justice Parghi found the termination clause “runs afoul of the requirements of the [ESA] and is therefore void and unenforceable.” The problematic language (which is common in employment agreements) said that, during the probationary period, the employer could terminate the employee “at any time and for any reason at its discretion, without notice or pay in lieu of notice.” The court held that this kind of “any time” / “for any reason” wording is incompatible with the ESA because employers do not have an absolute right to dismiss employees in all circumstances, including where reprisals are prohibited.
Then the Court cited Waksdale and ruled that “the entire termination provision in the agreement [is] void and unenforceable.” That matters in dentistry because dental employment contracts often combine “probation,” “without cause,” and “for cause” termination language in a single section. If any one of those sub-clauses is offside, you may be exposed to common law reasonable notice, which IS WAY more costly than ESA minimums.
Lessons For Dentists
Lesson #1: don’t include “for cause” termination provisions in your employment agreement OR get an employment lawyer involved to make sure they comply with the ESA. You can’t contract out of the ESA or impose a lower standard than what the ESA (and the regulations made under the ESA) says. Remember: the ESA only allows zero notice in narrow circumstances—essentially “wilful misconduct” and similar high thresholds. The court emphasized that the ESA standard is “significantly more onerous” than what past courts have found merit immediate termination. If your contract doesn’t explicitly align with the ESA standard, you risk the same result NYX faced: the clause is treated as an improper attempt to contract out of the ESA, and you lose the protection of the termination clause entirely. Then you have to pay up under the Common Law!
Lesson #2: probationary periods aren’t necessary safe trial periods. This case shows probation is not a magic shield. Because the probation clause was embedded inside an unenforceable termination section, the court held Chan “was not a probationary employee and was entitled to reasonable notice upon termination.” The judge leaned on the Supreme Court of Canada’s policy logic from Machtinger: if a termination term is invalid, the presumption of reasonable notice is not rebutted. In plain terms, you do not get to salvage the “intent” of probation if the contractual machinery that created it is void. The court stated the point sharply: “If a term is null and void, then it is null and void for all purposes, and cannot be used as evidence of the parties’ intention.” The employer in the Chan case would have been better off NOT having the probation clause at all or any termination clause OTHER THAN termination with notice and a waiver of the common law.
Lesson #3: check your contracts now. Be proactive. Don’t wait and try to let someone go with a faulty contract only to learn an expensive lesson. Reach out to professionals like DMC to have us review your employment agreements to see if they’d pass muster. If you are using an older template, maybe something you used in the past or found online, or a contract copied from another industry, you may be carrying silent liability. Whatever you’ve got, it’s not worth the paper it’s written on and shouldn’t be relied upon to terminate someone. Your best bet is to either make sure your contract’s language is not offside the ESA or JUST DO NOT include ‘just cause’ termination provisions anywhere (including in probation clauses).
