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Don't Make Oral Promises Be Sure To Get It In Writing

The Facts

 

In the late afternoon of August 8, 2005, Mr. Rejdak found himself in a bit of a pickle. He had just completed his first day of work for TFN when he was handed an employment contract that included a probationary term. He recalled that when he had been hired over the phone on August 5th, he and the director, Mr. Sobie had discussed his salary, title and start date, but there had not been any discussion about a probationary term. None-the-less, Mr. Rejdak did not feel that he had any choice but to sign the employment contract because he had quit his job of many years after speaking with Mr. Sobie. He signed the contract and returend it to work the next day.

 

About six weeks later, TFN hosted a party and Mr. Rejdak attended but he did not show up for work until two days after the party. When he finally did show up, TFN dismissed him without notice. Mr. Rejdak commenced a claim for wrongful dismissal.

 

At court, Mr. Rejdak's position was that had been hired during the phone conversation in early August 2005, and that there had been no discussion about a probationary term. TFN's position was that there was no offer of employment until Mr. Rejdak was presented with the employment contract.

 

The Outcome

 

The trial Judge concluded the Mr. Rejdak believed he had been hired during the telephone conversation in early August, 2005, as he would not have resigned from his job otherwise. It was during the telephone conversation that Mr. Rejdak entered into an oral contract with his employer. The court found that Mr. Rejdak started to work for TFN on August 8, 2005, and that the employment contract was signed the following day on August 9, 2005.

 

Once the court determined that an oral contract had been formed, the court had to decide whether the signed employment contract was enforceable. The Judge concluded that the written employment contract was not enforceable because there had not been any new "consideration."

 

Consideration is one of the critical ingredients necessary to the formation of any contract. Consideration generally exists when a party either gives or promises to give benefit to the other party or suffers or promises to suffer a detriment to itself. In the case of an employment contract the prospective employee agrees to work and the employer agrees to compensate the employee for his or her work. A basic principle of contract law is that if an existing contract is to be changed, there must be a new or additional consideration, such as a bonus, raise or promotion that the employee was not already entitled to.

 

Since the written contract was not binding, Mr. Rejdak was owed reasonable notice or pay in lieu of reasonable notice. After considering his age, the fact that he had not found similar work at the time of the hearing and his specialized training and skills, the court determined that the appropriate notice period was four months.

 

The Lesson Learned

 

TFN could have avoided this mishap by being careful in its communications with Mr. Rejdak during the hiring process and my insisting that Mr. Rejdak sign the employment contract before he started to work.

 

Rejdak v. The Fight Network Inc. (TFN)- Ontario Superior Court of Justice- July 29, 2008