By Jeffrey R. Smith ([email protected])
Cutting jobs can be a tough undertaking for an employer and not just because it usually means it’s going through some shaky financial times.
There are plenty of obligations employers have to live up to under employment standards law, such as reasonable notice, temporary layoff rules and mass termination rules. Not to mention the human cost of telling people they’re out of a job and the potential effects on the HR and management people who have to do the telling.
Though it may be the most prudent measure at the time, cutting jobs comes at a cost because of these obligations. But what if the jobs are eliminated before anyone even starts working at them?
Ford Canada has been in the news recently because it was faced with this precise circumstance. In July 2008, the automaker was planning to add a third shift at its plant in Oakville, Ont. It offered jobs as assemblers to hundreds of people to fill that shift. However, a week before the shift’s planned start date of July 28, a downturn in sales caused the company to announce it would be postponing the start date. In early August, Ford proceeded to cancel the shift altogether and informed its prospective new employees there would be no assembler jobs after all.
A class action lawsuit against Ford filed by the out-of-luck job seekers was recently certified by an Ontario court and will go to trial, unless a settlement is reached. Though the people hadn’t technically started their jobs, many claimed they had already quit or given notice at their previous employers and couldn’t go back. This, they claimed, put Ford on the hook for wrongful dismissal as if they had already been working at the automaker.
This situation raises the question of when employment actually starts and what the employer’s obligations are in the hiring process. Is a job offer an official employment contract, whether anything has been signed or not? Does it matter whether the prospective employee has performed any actual work or not? How much should factors such as the prospective employee’s quitting of a previous job come into play?
In Ford’s case, the certification of the lawsuit appears to indicate the prospective employee’s case has legs. It remains to be seen whether the courts consider them to have become employees and what Ford’s obligations to them are.
Jeffrey R. Smith is the editor of Canadian Employment Law Today, a biweekly newsletter that looks at employment law from a business perspective. For more information, visit www.employmentlawtoday.com.