Rescinding Job Offers Can Result in Liability for Employers

  • November 02, 2020
  • Justin P'ng, Fasken Martineau DuMoulin LLP

Ending an employment relationship can be fraught with legal risks. Sometimes these risks arise even before the employee has started working for the employer. A recent decision, Kim v. BT Express Freight Systems,[1] confirms that employers may be liable for damages if they revoke an accepted offer or terminate an employment relationship before the employee actually begins working.

What Happened

The employee was recruited by a new employer with the promise of a much higher salary. He signed a written offer, and gave notice to his former employer. Less than a week before his start date, the new employer told him his job offer was being rescinded without any explanation or compensation. As his previous role had already been filled, he was unemployed for approximately ten weeks before eventually finding new employment.

The employee sued. After the employer did not respond to the claim, the court was asked to decide how much money he should be paid by the new employer. The new employer did not appear for the court hearing.

The Decision

The judge accepted all of the facts stated by the employee because the new employer did not respond to the claim or appear in court. Based on those facts, the judge found that the new employer breached the employment agreement by unilaterally ending it without notice or cause.

The judge said an employment contract creates an employment relationship even before any work begins. When that relationship is terminated, the  employee is  entitled to notice or pay in lieu. The judge also found that the probationary clause in the contract -- allowing termination at any time in the first three months without notice or pay in lieu -- did not apply because the employee never had the opportunity to start work and begin the probation period. As in any other case of wrongful dismissal, the judge said the reasonable notice period was to be calculated based on the character of employment, the age and length of service of the employee, and the availability of similar employment and other relevant factors. Based on these factors, as well as the inducement of the employee, the judge awarded damages equal to three months’ salary at the level promised in the employment agreement, less his earnings from new employment during that time.