Can an employer rescind a job offer after you’ve accepted it? Yes, but withdrawing an accepted job offer can have legal consequences. In Ontario, Alberta and British Columbia, an employer may owe you compensation even if you haven’t worked a single day.

If you accepted a new job, resigned from your previous position or made plans based on the offer, you could have a claim for wrongful dismissal or breach of contract. Your rights depend on the agreement, any conditions attached to the offer and the circumstances of its withdrawal.

⚠️ Job offer withdrawn? Don’t assume you’re owed nothing because you haven’t started work. An accepted job offer can create a legally binding employment contract before your first day.

Reviewed by: Lior Samfiru, Employment Lawyer and National Co-Managing Partner

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Can an Employer Rescind a Job Offer After You Accept?

Yes. An employer can withdraw a job offer, but they may have to compensate you if you’ve already accepted it.

Once you accept a valid employment offer, a binding contract can exist even if your start date is weeks away. If the employer cancels that agreement without a valid legal basis, you may be entitled to damages.

There’s an important difference between these two situations:

  • Offer withdrawn before acceptance: An employer can usually withdraw an offer before you’ve accepted it, provided no other legal obligation has arisen.
  • Offer withdrawn after acceptance: If a binding agreement has been formed, withdrawing the job offer can amount to a breach of contract or wrongful dismissal.

An employer’s change of plans, hiring freeze or decision to eliminate a position doesn’t automatically eliminate its contractual obligations.

Are You Entitled to Severance if Your Job Offer Is Rescinded?

You may be entitled to compensation even if you never started working. If your accepted job offer created a binding employment contract, the employer may owe damages for ending that agreement without proper notice or compensation.

The amount depends on factors such as:

  • The terms of your employment agreement.
  • The salary and position you were offered.
  • Whether the employer recruited you from another job.
  • Whether you resigned or gave up other opportunities to accept the offer.
  • Your age, experience and prospects for finding comparable employment.
  • Whether you found replacement work and what you earned.

Compensation may include pay and benefits associated with an appropriate notice period, depending on the applicable law and contract. In some circumstances, other proven losses may also be relevant.

? Important: Employment standards minimum notice and common-law wrongful dismissal damages aren’t the same thing. Even if you haven’t worked long enough to qualify for statutory termination pay, you could still have a contractual claim.

Read our guide to severance pay in Canada to understand how compensation after job loss is assessed.

What if You Already Quit Your Previous Job?

If you resigned from a secure job to accept a new position that was later withdrawn, you may have a stronger claim for compensation.

Courts can consider whether a new employer persuaded you to leave an existing position. This is known as inducement.

For example, imagine that:

  • You work for a company for five years.
  • Another employer offers you a better position and higher salary.
  • You accept the offer and resign from your current job.
  • The new employer cancels your position a week before your start date.

You may have a claim against the new employer, particularly if you relied on its promise of employment when leaving your previous job.

However, quitting your old job isn’t a requirement for every successful claim. A binding employment agreement can create rights even if you weren’t previously employed.

What if You Signed an Employment Contract?

A signed and accepted employment agreement can create legally enforceable obligations before your first day of work.

But signing a contract doesn’t automatically mean you’ll receive a particular amount of compensation. The wording matters, especially clauses dealing with:

  • Termination of employment.
  • Probationary periods.
  • Conditions that must be satisfied before employment begins.
  • Salary, benefits and bonuses.
  • The employer’s ability to change or cancel the agreement.

An employer can’t assume that every termination or cancellation clause in an employment agreement is enforceable.

Our guides to employment contracts in Canada and employment contract review explain what employees should check before signing.

Can an Employer Withdraw a Conditional Job Offer?

Yes. An employer may be able to withdraw a conditional offer if a genuine, lawful condition isn’t satisfied.

Common conditions include:

  • Satisfactory reference checks.
  • Required background checks.
  • Proof of professional qualifications or licences.
  • Authorization to work in Canada.
  • Other clearly stated requirements of the position.

However, an employer can’t necessarily rely on a condition to withdraw an offer arbitrarily or in bad faith. The condition must be interpreted in light of the agreement and applicable law.

An employer also can’t withdraw an offer for a discriminatory reason prohibited by human rights legislation.

⚠️ Before accepting a conditional offer: Consider waiting until the conditions are satisfied before resigning from your current position. If you’ve already resigned and the offer is withdrawn, get legal advice before accepting the employer’s explanation.

Does a Probationary Clause Apply Before You Start Work?

An employer can’t automatically rely on a probationary clause to avoid paying compensation when it withdraws an accepted offer before your first day.

A probation period in Canada is commonly intended to give an employer an opportunity to assess an employee after work begins. If you never started, the employer may not be able to rely on a clause written for termination during an initial period of employment.

The exact wording of the contract and the applicable provincial law still matter.

An Ontario court addressed this issue in a case involving an employee whose accepted job offer was cancelled before his start date.

Ontario Court Case: Employee Awarded Three Months’ Pay After Job Offer Withdrawn

In Kim v. BT Express Freight Systems (2020), the Ontario Superior Court considered whether an employer could withdraw an accepted job offer before the employee started work without paying compensation.

The employee had been recruited from another company, accepted a new job paying $80,000 annually and resigned from his previous position.

Shortly before his start date, the new employer withdrew the offer. His former employer had already filled his position, leaving him without a job.

The court found that a valid employment relationship existed before the employee’s first day and awarded damages based on three months’ reasonable notice. Earnings from subsequent employment reduced the amount payable.

The court also rejected reliance on the probationary clause in the circumstances because the employee had never been given the chance to start work.

? What this means for employees: An accepted job offer can have legal consequences even before employment begins. You may be entitled to compensation if an employer cancels your position without a valid legal basis.

Every case is different. The three-month award in Kim isn’t an automatic entitlement for everyone whose job offer is withdrawn.

What Should You Do if Your Job Offer Is Rescinded?

If an employer withdraws an offer you already accepted, take these steps:

  1. Keep the job offer: Save the signed contract, offer letter and any emails confirming acceptance.
  2. Get the reason in writing: Ask why the employer cancelled the position and whether the decision is final.
  3. Preserve evidence of your losses: Keep records of your resignation, lost income, relocation expenses and other decisions you made because of the offer.
  4. Keep looking for work: Take reasonable steps to find alternative employment and record your efforts.
  5. Don’t sign away your rights: Have any release or compensation offer reviewed before accepting it.
  6. Speak with an employment lawyer: Find out whether the withdrawal breached your agreement and what compensation you may be owed.

Frequently Asked Questions About Rescinded Job Offers

Can an employer rescind a job offer in Ontario?

Yes. However, if you accepted a valid employment offer, the employer may owe you compensation for withdrawing it. Ontario courts have awarded wrongful dismissal damages even when an employee never started work.

Can an employer rescind a job offer in Alberta?

Yes, but withdrawing a binding employment agreement can create a claim for damages. The terms of the offer, outstanding conditions and the circumstances of cancellation determine your rights.

Can an employer rescind a job offer in British Columbia?

Yes. If an accepted offer created an enforceable contract, withdrawing it may expose the employer to a claim. Compensation depends on the agreement and the employee’s circumstances.

Can I sue if my job offer was withdrawn?

You may have grounds to pursue a claim for wrongful dismissal, breach of contract or other losses, depending on what was promised and why the offer was withdrawn.

What if my job offer was only verbal?

A verbal offer can create a binding agreement if its essential terms were agreed upon. Emails, text messages and other evidence can help establish what was offered and accepted.

What if I quit my previous job to accept the offer?

That can be an important factor in your claim, particularly if the new employer recruited you away from secure employment. Preserve your resignation correspondence and the new offer.

Can an employer rescind a job offer after a background check?

If the offer was genuinely conditional on a satisfactory background check, the employer may be entitled to withdraw it when that condition isn’t met. The wording of the offer, the employer’s conduct and human rights laws still matter.

Can my employer withdraw a job offer because of a hiring freeze?

A hiring freeze may explain the employer’s decision, but it doesn’t automatically eliminate obligations under an accepted employment agreement.

Can I receive severance if I never worked a single day?

Yes, in some circumstances. A valid employment agreement can create contractual rights before work begins. The compensation available depends on the agreement and applicable law.

Get Legal Help After a Rescinded Job Offer

Losing a job before your first day can leave you without income, especially if you’ve already resigned from another position.

The employment lawyers at Samfiru Tumarkin LLP help non-unionized employees in Ontario, Alberta and British Columbia understand their rights when employers withdraw accepted offers.

Our team can review your employment agreement, determine whether the withdrawal creates a legal claim and pursue compensation you’re entitled to receive.

For more information about your provincial rights, visit our Ontario employment law, Alberta employment law and BC employment law pages.

Before you sign, always check first.

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