Delaying start date could amount to employee’s constructive dismissal
Question: Once a job candidate accepts an employment offer, would delaying the start date be a breach or fundamental change in the employee’s employment contract?
Answer: Delaying the start date of an employment contract could be a fundamental change amounting to constructive dismissal. Whether it would be such a change would depend on the circumstances.
The Supreme Court of Canada recently clarified the law relating to constructive dismissal in its decision in Potter v. New Brunswick Legal Aid Services Commission.
It confirmed constructive dismissal could occur in two ways: a unilateral change that substantially changes an essential employment term or employer conduct that indicates an intention to no longer be bound by the contract.
In establishing the first form — a substantial alteration of an essential term — it must be shown a reasonable person in the same situation as the employee would have felt the essential terms of the employment contract were being substantially changed at the time the breach occurred.
Although constructive dismissal typically involves changes to an employee’s compensation, work assignments or place of work, it is certainly not limited to those circumstances.
If a firm start date can be regarded as an essential term on the facts, a substantial alteration of that term could constitute a constructive dismissal.
Horvath v. Joytec
In Horvath v. Joytec Ltd., an employee had accepted a job offer with a start date of either Dec. 1 or Jan. 2 and a promise from the new employer to provide a firm date by the end of October. Subsequent discussions indicated a start date of Jan. 2 would be most likely.
In November, the employee resigned her existing employment effective mid-December and informed the new employer by telephone that she had done so.
Although there was some dispute as to what transpired in the telephone conversation, the employee wrote to the new employer shortly thereafter confirming her continuing interest in the position and her awareness there would be some delay in the commencement of her employment.
At trial, she testified she understood from the parties’ discussions she would likely start in February, but a March date was possible.
The employee telephoned the new employer in February and was told June or July was more likely and, if she could not wait, she should look for other employment. She did so and eventually found employment at a reduced salary.
The trial judge found a concluded contract of indefinite hiring that was to commence no later than March 2.
The employer had breached that contract.
Reasonable notice of the termination was six months under the circumstances, which included the fact the employer had induced the employee to leave her former employer and had done so at a time when economic conditions made it difficult for the employee to find replacement employment.
The delay in Horvath was extreme. It is unlikely a delay of a few days would constitute a substantial or fundamental alteration of even a firm start date for employment.
However, an employee might reasonably regard a longer delay as significant.
An employer faced with a delay in providing work under an accepted offer of employment would be well-advised to inform the new employee at the earliest possible time and to be straightforward and honest about the reasons for the delay.
If an anticipated unilateral delay of an agreed-to start date is likely to be more than minimal, the employer should be aware its new employee might be in a position to claim constructive dismissal and reasonable notice without ever having worked a day.
For more information see:
• Potter v. New Brunswick (Legal Aid Services Commission), 2015 CarswellNB 87 (S.C.C.).
• Horvath v. Joytec Ltd., 1989 CarswellSask 329 (Sask. Q.B.).
Tim Mitchell practises management-side labour and employment law at Norton Rose Fulbright’s Calgary office. He can be reached at (403) 267-8225 or email@example.com.