Can an Employer Rescind a Job Offer in Ontario?
In Canada, non-unionized employees are typically provided with a written employment contract to be signed before commencing employment. This contract sets out the terms of the employment and is a binding agreement between the employer and employee. It is common for an employee to start work sometime after signing the employment contract. But what happens if an employer decides to retract a job offer after it has been accepted? The Ontario Superior Court of Justice case Kim v. BT Express Freight Systems addresses this exact scenario.
Background Facts of the Case
In this case, the Plaintiff sought employment with the Defendant and signed an employment contract to start work shortly thereafter. Less than a week before the Plaintiff’s first day, the Defendant suddenly rescinded the job offer without providing any reasoning.
The Plaintiff then sued the Defendant for wrongful dismissal, arguing that no notice or pay in lieu of notice had been provided for the rescinded job offer.
Judge’s Decision
The judge determined that an employment relationship had been created even though the Plaintiff had not yet performed any work. As a result, the Plaintiff was entitled to notice or pay in lieu of notice for the dismissal. Since the Defendant did not defend against the claim, the judge accepted the Plaintiff’s arguments for entitlement to common law reasonable notice as fact, without examining the enforceability of the employment contract.
Although the employment contract included a three-month probation period clause, the judge ruled that the probation period had not begun because the Plaintiff had not started working. Consequently, the judge awarded the Plaintiff three months of pay in lieu of notice for wrongful dismissal.
As Christopher Achkar, employment lawyer and founder of Achkar Law, explains:
“Rescinding a job offer can expose employers to legal claims if not handled carefully, especially when the candidate has relied on the offer to their detriment. Consulting with an employment lawyer before taking action helps manage risk and ensure compliance.”
Key Takeaways for Employers
Employers should be highly cautious when rescinding an accepted offer of employment, as doing so can expose them to significant liability for damages in court. Once an employment contract is signed, it typically becomes an enforceable and binding agreement, even if the employee has not yet started working. Not providing reasons for retracting the job offer can create further risks for employers.
To mitigate potential liability, employers should:
- Ensure employment contracts are properly drafted to prevent termination clauses from being found unenforceable.
- Recognize that a probationary period does not begin until the employee starts performing work.
- Consult with an employment lawyer before rescinding a job offer or dismissing an employee who has not yet started work.
How an Employment Lawyer Can Assist
If you find yourself in a situation where a job offer has been rescinded, consulting with an employment lawyer can be invaluable. An employment lawyer can assist by:
- Reviewing Employment Contracts: Ensuring your employment contracts are clearly drafted and legally sound to avoid future disputes.
- Advising on Legal Rights and Obligations: Providing clarity on your rights and obligations under Ontario employment law.
- Negotiating Settlements: Helping negotiate fair settlements if a job offer has been rescinded, including severance pay and other entitlements.
- Representing in Legal Disputes: Representing you in court or before tribunals if wrongful dismissal claims arise from a rescinded job offer.
- Preventing Legal Issues: Offering proactive legal advice to prevent potential legal issues from arising when rescinding job offers or making other employment decisions.
Conclusion
Rescinding a job offer in Ontario can lead to significant legal and financial consequences for employers. As seen in the case of Kim v. BT Express Freight Systems, an accepted job offer creates an employment relationship that entitles the prospective employee to notice or pay in lieu of notice if the offer is withdrawn. Employers should carefully consider their actions and seek legal advice to manage the complexities of employment law and avoid wrongful dismissal claims.
For more information or legal assistance regarding employment contracts and job offers, contact Achkar Law. Our experienced team of employment lawyers can help you understand your rights and obligations in the workplace.
Contact Achkar Law
Understanding the complexities of employment law can be challenging, especially when it comes to rescinded job offers and employment contracts. If you’re facing such issues, it’s crucial to seek professional legal assistance to protect your rights and interests.
At Achkar Law, our experienced team of employment contract lawyers is here to help. We understand the intricacies of employment law in Ontario and are dedicated to providing you with the best possible legal guidance and representation.
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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. ©
Workplace Law Topics: Employment Agreements, Employee Terminations and Layoffs, Employment and Labour Compliance, Workplace Disputes and Litigation