Can an Employer Rescind a Job Offer in Ontario?

Is an accepted job offer legally binding in Ontario?

Once a job offer is made, accepted, and supported by consideration the salary and benefits offered constitute consideration a binding employment contract may exist in Ontario. This is true even where the start date is in the future and even where the employee has not yet physically attended the workplace. The Ontario Superior Court confirmed in Kim v. BT Express Freight Systems that an employment relationship can be created before the first day of active work, entitling the employee to wrongful dismissal damages when the offer is rescinded.

Do I have to have started the job to claim wrongful dismissal in Ontario?

No. Ontario courts have confirmed that wrongful dismissal rights can attach before the first day of work. In Kim v. BT Express Freight Systems, the Ontario Superior Court awarded three months' pay in lieu of notice after an offer was rescinded before the employee's start date finding that an employment contract existed and that the employer could not rely on a probation clause because active employment had not yet begun. The existence of a binding employment contract does not depend on the employee having worked a single day.

What if I resigned from my previous job to take the new position that was then rescinded?

Resigning from a previous position in reliance on an accepted offer significantly strengthens your damages claim. Courts assess reliance damages compensation for the harm you suffered by acting on the employer's offer in good faith as part of the wrongful dismissal analysis. The fact that you gave up secure employment to take the new role, and the difficulty of recovering that position or finding equivalent work, are all relevant to the quantum of damages the employer may owe. Document your resignation from the previous role carefully.

Can an employer rescind a job offer for business reasons without owing anything?

Not where a binding employment contract already exists. Business reasons budget cuts, restructuring, a change in hiring needs, economic conditions do not automatically eliminate liability where an accepted offer has already formed a contract. The employer may still owe notice or pay in lieu, and reliance damages where the employee acted on the offer in good faith. The employer's reasons for rescinding affect the factual narrative but do not eliminate the contractual obligation that arose when the offer was accepted.

Does a probation clause protect an employer who rescinded an offer before the employee started?

Not necessarily and in the specific scenario where the offer was rescinded before the start date, the Ontario court in Kim v. BT Express Freight Systems found that a probation clause did not apply at all because active employment had not yet begun. Probation clauses operate within an employment relationship that has been established and begun. Where the offer is rescinded before the employee's first day, the probation period has not yet started and cannot be relied upon to limit notice entitlements.