From time to time, we get a call from a person who has accepted a job offer, quit their existing job, and then been told that the job offer has been revoked before the person starts work.
The person wants to know, “Can the offer be revoked” and if so, “Am I entitled to any damages?”
In a recent case, a judge ordered an employer to pay damages to an individual in this kind of situation.
Buchanan v Introjunction Ltd.
On October 16, 2016, Mr. Buchanan accepted an offer of employment from Introjunction and signed an employment contract. As he was expected to commence work on November 1, 2016, Mr. Buchanan quit his existing job. After he quit, on October 29, 2016, Introjunction revoked his offer of employment. Mr. Buchanan initiated a wrongful dismissal action, seeking four months’ pay in lieu of notice of termination of his employment.
Introjunction attempted to argue that Mr. Buchanan was not entitled to reasonable notice of termination because his employment contract contained a three-month probationary period which allowed Introjunction to terminate him without notice within the first three months of his employment.
The court disagreed with Introjunction’s position. The court found that even if the probationary clause applied, such a clause required that the employer assess Mr. Buchanan’s suitability for the role. Because Introjunction had revoked Mr. Buchanan’s employment offer before he began work, suitability could not have been a factor in the decision to terminate his employment. The court also found that by retracting the job offer, Introjunction demonstrated a clear intention to not honour the employment contract. Having repudiated the contract, Introjunction could not rely on any provision in the contract. Therefore, it was liable to provide reasonable notice of termination of the employment contract, in this case six weeks’ pay.
Lessons to be learned:
- Make sure you ask a potential new employer enough questions to satisfy yourself that there is very little chance that the job offer will be revoked. For example, is it a new position? Is the employer experiencing any financial problems?
- If you are leaving a secure position to accept a new job then try to negotiate a termination clause that provides for a minimum notice of termination.
An employment lawyer can assist you by reviewing each term of an employment contract and suggesting changes to the offer that benefit you, such as a change to the termination clause. If you have an employment contract that you would like reviewed, a lawyer at MacLeod Law Firm would be happy to assist you. If you would like to speak to a lawyer at MacLeod Law Firm, you can reach us at [email protected] or 647-204-8107.
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