The concept of an employee being owed reasonable notice prior to ever even starting work with an employer may seem a little peculiar. However, it is not unheard of in the law. In fact, the British Columbia Supreme Court recently held in Buchanan v. Introjunction Ltd. (c.o.b. Otherly), 2017 BCSC 1002 that an employee whose employment contract was terminated prior to starting work was entitled to 6 weeks of reasonable notice.
Colton Buchanan had worked in the web design field for over 5 years when he applied for a job as a senior software engineer with Introjunction Ltd. After several meetings with the company, Buchanan was offered the position and provided with an employment contract (the “Contract”). On October 16, 2016, Buchanan signed the Contract, which had a start date of November 1, 2016. Buchanan left a secure job with another employer for this employment opportunity.
Unfortunately for Buchanan, on October 29, 2016, the Chief Executive Officer of Introjunction Ltd., Mike Nabavi, informed Buchanan that they were retracting its offer of employment – 3 days before he was supposed to start work. Introjunction Ltd. had changed its mind in regards to its business and staffing requirements. Nabavi followed up their meeting with a letter that confirmed the retracted offer and a couple of emails with short-term offers of employment. Buchanan did not answer these emails.
Buchanan sued Introjunction Ltd. for wrongful dismissal.
The Contract between Buchanan and Introjunction Ltd. contained a “probation” clause, which stated that:
“Employee’s employment shall be subject to a probation period of three months beginning on the Effective Date during which time the Employer may terminate the employment without notice or cause.”
The major issue of this case was whether or not the probation clause in the Contract was enough to restrict Buchanan’s common law notice entitlement. Upon analysis, the Court found that Introjunction Ltd. could not rely on the probation clause since:
- The probation clause was only applicable for the 3 months after Buchanan was to start work. Since the Contract was revoked prior to Buchanan commencing his employment, the probation clause was not yet in effect;
- The purpose of a probationary period is to allow the employer time to assess in good faith the new employee’s suitability for his or her position within the company. In this case, even if the probation clause applied, Introjunction Ltd. did not conduct a good faith assessment of Buchanan’s suitability – rather, it changed its mind about its staffing needs; and
- Introjunction Ltd.’s retraction of the Contract amounted to a repudiation of the Contract, which was accepted by Buchanan. This would allow Buchanan to treat the Contract as at an end and sue Introjunction Ltd. for damages. However, this area of contract law was not addressed by the parties so the Court based its decision mostly on the first two reasons above.
Since the probation clause was not applicable, the Court found that Buchanan had been wrongfully dismissed and awarded him with six weeks of reasonable notice. In coming to this amount, the Court took into account: the nature of the position, the relatively high salary, the fact that Buchanan left a secure job to work for Introjunction Ltd., the minimal length of service – in this case none, the precariousness of the position, and the availability of alternative employment.
The Court also found that Buchanan successfully mitigated his losses – he took reasonable steps to find alternative employment. Although he had never responded to Nabavi’s emails about short-term employment, this was not held against Buchanan since the offers were vague and at a reduced salary. Buchanan found employment with a different company that started on December 19, 2016.
Lessons for Employees
If your employment agreement is cancelled before your first day of work you may still be entitled to reasonable notice. Having an Employment Law Lawyer review your Employment Agreement prior to its signing will help ensure you are aware of your rights and requirements under the Agreement. Further, being terminated during your probationary period could result in a notice requirement if the employer did not conduct a good faith assessment of your suitability for the position. Seeking the advice of an Employment Law Lawyer when you are terminated can help you determine whether or not you are entitled to reasonable notice.
Lessons for Employers
You should always ensure you have an Employment Agreement for any employee you hire. The Agreement should be drafted in such a manner that considers that an employee could be terminated prior to the employee’s start date. Having an Employment Law Lawyer draft your Employment Agreement can help prevent costly notice periods when the employee’s employment is terminated, either before or after the employee’s start date.
Minken Employment Lawyers is your source for expert advice and advocacy on today’s employment law issues. Whether you are an employer or an employee, we can help. Contact us to see how.
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