rescind offer of employment, workplace lawyers

Can an Employer Rescind an Accepted Offer of Employment?

Normally in Ontario, non-unionized employees will be provided a written employment agreement to be signed prior to commencing employment with an employer. The employment agreement is a binding contract setting out the terms of the employment. It is common for an employee to have their first day of work sometime after the employment agreement has been signed. But what happens if an employer rescinds an accepted offer of employment? The Ontario Superior Court of Justice case Kim v. BT Express Freight Systems discusses this exact scenario.

What are the background facts of the case?

The Plaintiff sought to become employed by the Defendant and had signed an employment agreement to commence employment not long after. Less than one week prior to the Plaintiff’s first day of work, the Defendant suddenly rescinded the offer of employment without providing any reasoning.

The Plaintiff then sued the Defendant for wrongful dismissal, as no notice or pay in lieu of notice had been paid to the Plaintiff for the dismissal of the soon to begin employment.

What was the judge’s decision?

The judge determined an employment relationship had been created even though no work had yet been performed. As such, the Plaintiff was entitled to notice or pay in lieu of notice for the dismissal. As the Defendant did not defend against the claim, the judge took the Plaintiff’s arguments of entitlement to common law reasonable notice as fact, without looking at the enforceability of the employment agreement.

While the employment agreement contained a probation period clause lasting three months, the judge determined the probation period had not begun as the Plaintiff was unable to begin performing work. As such, the judge awarded the Plaintiff three months of pay in lieu of notice for the wrongful dismissal.

Key Take Away for Employers

Employers should be highly cautious when rescinding an accepted offer of employment as doing so can open them up to significant liability for damages at court. Once the employment agreement is signed, it typically becomes an enforceable and binding contract of which terms can be upheld, even where the performance of work has not yet started. Not providing reasons for the rescinding of the offer of employment can create further risks for employers.

Employers should ensure their employment agreements are properly drafted to prevent the termination clause from being found to be unenforceable, thus limiting the potential monetary liability for a termination of employment. Additionally, employers should take note of the fact that a probationary period does not come into effect until the employee begins performing work.

Employers should ensure they speak with an employment lawyer before dismissing an employee, including those employees who have not yet commenced the employment.

Contact Us

If you are an employer and would like further information on how to safely dismiss the employment of an employee or an employee who has been dismissed from your employment, our team of experienced workplace lawyers at Achkar Law can help. Contact us by phone toll-free at +1 (800) 771-7882 or email us at [email protected] and we would be happy to assist.

If you are a small or medium-sized company looking for full-service support with same day response, visit our CLO Program page for our strategic solutions.