The recent British Columbia Supreme Court decision of DeGagne v. Williams Lake (City), 2015 BCSC 816 confirms that an employer’s obligation to pay notice can arise prior to the commencement of an employee’s service.

The employee was offered and accepted employment with the employer and signed an employment offer letter to that effect. The terms of this employment offer had included a six month probationary period, which permitted the employer to dismiss the employee on one month’s notice. An anonymous letter was subsequently received by the employer which was highly critical of the employee with respect to his previous employment. This persuaded the employer to terminate the employee’s employment contract prior to his commencement of any work.

The Court found that the accepted offer of employment constituted a binding contract between the employee and the employer. Although the employer attempted to rely on the probationary provisions stated in the employment offer, the Court concluded that these were of no effect, as the employee had yet to commence his employment with the employer and, therefore, the probationary period had yet to be initiated. The Court went on to award six months’ severance based on a subsequent clause in the employment offer, which stipulated a defined notice period if the employee was dismissed “during the first year of the Agreement”.

What does this mean for employers/ employees?

There are circumstances where an employee can be entitled to substantial severance even if the employee has yet to commence his or her work. Accordingly, careful attention needs to be paid to this element of the contract drafting process, particularly where an employee is to commence his or her work sometime after the employee’s actual date of hire.

Parlee McLaws’ Labour and Employment group offers a full range of services and advisory capabilities to help organizations of all sizes address labour and employment issues.

This post is intended to provide general information concerning developments in the law and is not intended to provide legal advice in respect of any particular situation.