June 9, 2004 by Israel Foulon LLP
Question: Due to changes in the business, we no longer have a need for an employee who is supposed to start next week. We wish to terminate his employment before he starts. What do we do?
Answer: Sometimes employers assume that because the employment has not started yet, their obligations to the employee have also not yet begun. But in a situation where an employer hires an employee and the employment contract has been signed, but prior to the start date the employer company’s plans change and the job opportunity is eliminated, an action can be brought by the employee for anticipatory breach of contract against the employer.
If the employee can establish an offer was made and accepted, that the employer has communicated it will not follow through on the contract and there is a lack of justification for such conduct, the employee may succeed for damages for the breach. The employee will, of course, have to prove the value of the damages that she has sustained.
An employer may be able to defend such a claim by showing a justification for the repudiation of the employment contract. The employer may also be proactive and offer positions of employment on a conditional basis, which could protect the employer in the event the employment opportunity does not materialize at all.
It is also important to note such a circumstance may include other issues such as inducement and negligent misrepresentation. Accordingly it may be wise to consult with an employment lawyer to discuss the particular facts involved before taking any action.
Peter Israel is the senior partner in the Toronto law firm of Israel Foulon LLP – Employment and Labour Lawyers. He can be reached at 416-640-1550 or pi@qtw38575.mywhc.ca. A version of this article originally appeared in the Carswell publication, Canadian Employment Law Today