A recent case is a cautionary tale of what can happen if an employer rushes a hire.
The facts
In this case, a former colleague emailed Mr. Buaron about an IT position at Acuityads Inc. Mr. Buaron said he was interested and met with the employer’s COO that night and she verbally offered him a job on the spot. Two days later she confirmed the start date, salary, probationary period, when benefits would begin, and his vacation entitlement in an email. Mr. Buaron then resigned his employment. Shortly thereafter Acuityads Inc. sent him its standard employment contract with a termination clause that limited his rights on termination and Mr. Buaron signed it before he started work.
Mistakes made by the employer
The employer did not attach its standard employment contract to the email, which confirmed the terms of employment that were discussed at the interview. As a result, the court found that only the terms of employment set out in the email had been agreed upon.
The court concluded that once Mr. Buaron had resigned, he had no choice but to sign the standard employment agreement. Acuityads Inc. did not provide Mr. Buaron any new or additional consideration for signing this agreement which took away some of his rights including his right to receive reasonable notice of termination and the court concluded the contract was not enforceable.
Mr. Buaron, who was 34 years old, was terminated after nine months’ employment. The court concluded he should have received four months’ notice of termination.
If the employer had not rushed and required Mr. Buaron to sign the standard employment contract before he resigned then it could have limited its liability to one week’s pay; resulting in savings of about $35,000.
Lessons to be learned
1. Make sure all prospective employees sign a comprehensive employment contract before the person resigns his employment elsewhere.
2. If an employee signs a comprehensive employment contract before commencing employment it does not always mean the contract is legally enforceable.
3. Do not provide a partial offer of employment to a prospective employee unless you are prepared to provide additional consideration to have him or her sign a more comprehensive employment contract.
For more than 25 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him at 416 317-9894 or at doug@macleodlawfirm.ca
