06 Apr Can an Employer Take Back a Job Offer in Ontario?
Networking, applying to jobs, and attending multiple interviews takes significant time and effort. Receiving a job offer in today’s competitive job market is incredibly exciting — especially after putting in the work to get to this point. But what happens if the employer decides to take that opportunity away? If an employer rescinds your job offer, it is important to understand the legal implications and what your rights are.
A Job Offer Can Become a Binding Contract
In Ontario, once you accept an employment offer that includes the key terms of employment, it generally forms a binding contract, even if you haven’t started working yet. Employment contracts do not require you to begin work for the agreement to be enforceable.
For the contract to be binding, it must include an offer from the employer, acceptance by the employee, and consideration, meaning a promise of work in exchange for the employee’s acceptance.
In other words, as soon as both you and the employer agree to the terms, the contract becomes legally binding. If an employer rescinds the offer without legal justification, this can be considered a termination of employment, giving rise to potential legal remedies.
Could this Situation be Deemed a Wrongful Dismissal?
Yes. In Ontario, rescinding an accepted employment offer is treated as the equivalent of termination, even if the employee has not yet started working.
In Kim v. BT Express Freight Systems, the Ontario Superior Court held that if an employer revokes an employment agreement without cause or proper notice, the employee may be entitled to wrongful dismissal damages, even before the first day of work.
In this case, the plaintiff accepted a job offer and resigned from his previous position. Prior to his first day on the job, the employer rescinded the offer without notice or compensation. The court awarded the plaintiff reasonable notice damages, reduced by any income he earned after the offer was withdrawn.
Is there a Situation Where an Employer Can Legally Rescind an Offer?
There are limited circumstances where an employer may legally withdraw an offer without being legally liable for damages.
The first scenario is if the offer was conditional. Meaning, if the offer was conditional on things like a background check, drug testing, or credential verification, the employer can withdraw the offer if these conditions are not met.
The second scenario is withdrawing the offer due to just cause or misrepresentation. If the candidate provides false information during the application or interview process, the employer may have just cause to withdraw the offer.
If an Employer Wrongfully Rescinds an Offer, What Damages Could You Be Entitled To?
If an employer withdraws an unconditional job offer, this may be treated as a wrongful dismissal. The employee may be entitled to reasonable notice pay or inducement damages under these circumstances.
Reasonable notice damages is similar to what an employee would receive if they were terminated without cause after starting work. If an employee resigned from a previous job, relocated, or otherwise suffered losses in reliance to the offer, they may be entitled to inducement damages.
How Courts Determine the Amount of Damages
Courts assess damages based on two key concepts: reliance and detrimental actions.
If an employee makes life decisions based on the job offer, such as quitting their previous job, relocating, or selling their house – this is considered “reliance”. Detrimental actions are the harms the employee suffers as a result of relying on the offer, for which the employer may be responsible.
The courts will weigh the following:
- Whether the employee resigned from their previous job after accepting the offer
- How long it took the employee to find new employment
- Financial losses incurred due to the rescinded offer
These factors influence the amount of damages awarded. Essentially, the more an employee relied on the offer and the more harm they suffered, the higher the compensation may be.
If your employer recently rescinded a job offer, and you want to understand whether you are entitled to damages, please contact KCY at LAW by submitting an online consultation request by phone at 905-639-0999 to book your consultation today.