The Consequences of Withdrawing an Accepted Job Offer

Kim v. BT Express Freight Systems

Starting a new job is an exciting and sometimes stressful transition. Upon accepting a job offer, employees often must make many changes and decisions including leaving their current job, relocating, and adjusting their budget pursuant to the new opportunity. One thing that is not top of mind is what happens if you lose the new job before it even starts?

In Kim v. BT Express Freight Systems, the Ontario Superior Court recently confirmed that those employees are entitled to severance, even if they have not started.

Overview of the Case

In this case, Mr. Kim was employed by Total Express Global Supply Chain (TE) but was offered a new job by BT Express Freight Systems (BTE). Mr. Kim accepted this new job offer by signing and returning the offer to BTE. Mr. Kim then resigned and informed TE that he would be moving on to a new job at BTE.

However, 2 days before his start date with BTE, Mr. Kim received an email from BTE informing him that the offer was being withdrawn and apologizing for any inconvenience they caused.

Unfortunately, TE had already replaced Mr. Kim, and Mr. Kim was out of a job.

The Court’s Decision

Ontario Superior Court confirmed that even though Mr. Kim had not started his new job, he was entitled to 3 months of severance pay.

The court emphasized that a valid employment contract creates an employment relationship even before any work begins. This entitles an employee to reasonable notice of the breach of that contract, and damages for failure to provide that notice.

In addition, the court reiterated that probationary periods are intended to provide an employee with a “trial period” during which the employer can determine whether the employee is a good fit for the position. However, probationary periods are not applicable when the employee never started and was therefore never afforded an opportunity to prove whether they are a good fit.

Takeaway for Employees

Severance if job offer withdrawn

If you have accepted a job offer, but the employer withdraws or terminates the position before you start, you may still be entitled to severance. It is prudent that you discuss any termination or withdrawal of a job offer with an employment lawyer to determine whether you are missing out on your legal entitlements. Use the Severance Pay Calculator to find out how much severance you may be owed.

Takeaway for Employers

Consider consequences of revoking employment before the employee starts

Employers must be aware that they can be liable for damages if they revoke an employment relationship before the employee actually begins work. Employers should be careful when rescinding accepted job offers, because the employment relationship is formed upon the signing of an employment contract, not when the employee begins work.

Probationary periods

Employers cannot rely on a probationary clause to mitigate their risk when an employee has not started work.

LEARN MORE
• Employee rights during a probation period
• Employment Law Show: Probationary Periods & Termination

Contact your employment lawyer

Employers should work with an employment lawyer to ensure that their employment agreements are carefully drafted to minimize their exposure upon termination.