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Guest Blog: Gorsky on Anticipatory Breach of Contract at Ford (Oakville)

Ford Canada recently offered jobs to about 350 employees, which caused some excitement in Southern Ontario, where jobs in the auto sector have been disappearing faster than chocolate placed near my kids. Alas, before the lucky new workers even reported to work, the company changed its mind, and told them there were in fact no jobs.  Some of these people had purportedly quit other jobs to join Ford, and were now out of a job.

In a Toronto Star piece reporting the story, Toronto employment lawyer Howard Levitt from Lang Michener suggested that the workers “have a right to compensation” for ‘anticipatory breach of contract’.   Doorey’s Workplace Law Blog asked Toronto labour and employment law lawyer Tom Gorksy, of Sherrard Kuzz, to explain that little area of the law, and his views on the status of the would-be Ford employees.

Here’s Tom’s Guest Blog:

Almost as soon as Ford cancelled its third shift at its Oakville plant,
calls were ringing out for lawsuits against Ford for having reneged on
350 job offers just before employees were to start work.  Where do
employers stand in such situations?

It is clear that the wannabe employees do not have a claim through the
Canadian Auto Workers, as they have not yet become employees.  But that
does not automatically mean that Ford is off the hook.  Non-unionized
employees presumptively retain their rights to sue for breach of an
agreement to hire.  There are cases where employees have been awarded
the equivalent of several months’ wages for breach of agreement to hire.

But it still seems unlikely that these employees will have much of a
case.  For one thing, there is every chance Ford covered its position in
its offers of employment, so that a lawsuit for breach of agreement to
hire would be stopped in its tracks.

And even if Ford has not protected itself through clauses in its
employment agreements, it has a strong argument that the employees
should have no more rights than if they had started employment and been
fired on the first day.  Had that happened, the collective agreement
would likely have provided that the employees were still within their
probationary period and not entitled to any further compensation.

The only good news for employees caught in this situation is that unlike

severance payments, if Ford does change its mind and agree to pay
compensation, such awards are tax-free!

 

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One Response to Guest Blog: Gorsky on Anticipatory Breach of Contract at Ford (Oakville)

  1. maybe Reply

    August 12, 2008 at 10:35 pm

    There might be an argument depending upon the collective agreement language as to whether they were employees, see: Re Saint John (City) and Saint John Fire Fighters’ Assn., Loc. 771 (Davidson), [2003] 115 L.A.C. (4th) 193 (Christie). In this decision, Arbitrator Christie rejected the City’s preliminary objection to its jurisdiction based on the allegation that the grievor was never employed because he was never hired. In so doing, he recognized that the grievor was an employee within the bargaining unit and under the collective agreement (even though the offer of employment had been revoked by the City after its acceptance by the grievor but prior to the grievor’s commencement of work).

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