Canadian Employment Law Today

November 7, 2018

Focuses on human resources law from a business perspective, featuring news and cases from the courts, in-depth articles on legal trends and insights from top employment lawyers across Canada.

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Have a question for our experts? Email Canadian HR Reporter, a Thomson Reuters business 2018 Answer: When employers are recruit- ing or interviewing job candidates, they should take care to ensure the informa- tion they provide is accurate and not mis- leading. Making promises that can't be fulfi lled, or withholding key facts from a candidate, can expose the employer to le- gal liability. Employment standards legislation in most provinces prevents misrepresen- tation in hiring. For example, s. 8 of the British Columbia Employment Standards Act states that an employer must not in- duce, infl uence or persuade a person to become an employee, or to work or be available for work, by misrepresenting the availability of a position, the type of work, the wages, or the conditions of em- ployment. Unfulfi lled pre-hiring promises can also give rise to claims for breach of con- tract, or for the tort of negligent misrep- resentation. It is important to remember that a con- tract of employment can be oral, or writ- ten, or both. Where promises are made in the pre-hiring process, they may be found to form part of the employment agree- ment between the parties. If the employer fails to deliver on the promise, the employ- ee may be able to make a claim for con- structive dismissal or breach of contract. As far as negligent misrepresentation is concerned, the leading decision in the employment context is Queen v. Cognos Inc. e employee, Queen, was a char- tered accountant who was securely em- ployed in Calgary when he interviewed for a job with Cognos, an Ottawa-based software company. Cognos had a num- ber of product lines, including a new line of accounting software known as "Mul- tiview." In the job interview, the Cognos representative told Queen that Multiview was a major project that would be devel- oped over a period of two years with en- hancements and maintenance thereafter, and the staff required to develop Multi- view would double within the next few months. What he failed to disclose, how- ever, was that the development funding for Multiview had not yet been approved by senior management, and the job Queen had applied for was also subject to budgetary approval. Cognos off ered Queen the job and he immediately accepted. He signed an em- ployment contract which stated that Cog- nos could terminate his employment with- out cause on one month's notice or salary in lieu. e trial judge found that Queen signed the employment agreement based on the representations Cognos made to him about the Multiview project, and that in the absence of those representations, he would not have accepted the off er and given up his job in Calgary. Two weeks after Queen started work at Cognos, senior management decided not to approve the proposed funding for Multiview. Queen was subsequently reassigned to diff erent roles and even- tually dismissed without cause. He sued Cognos for negligent misrepresentation and argued that by withholding highly material information in the job interview, Cognos had misrepresented the nature of the employment opportunity and in- duced him to give up his secure job in Calgary. e Supreme Court of Canada agreed and awarded Queen damages of over $67,000. ere are fi ve elements that must be proven for a negligent misrepresentation claim to be successful: ere must be a duty of care based on a "special relationship" between the representor and the representee. In a pre-hiring interview, an employer's representatives have a duty of care to exercise reasonable diligence in making representations about the relevant facts, including the nature and existence of the employment opportunity. e representation in question must be untrue, inaccurate or misleading. e representor must have acted negli- gently in making the misrepresentation. is goes beyond a duty to be honest, and requires the representor to ensure that the information provided in the job interview is accurate and not misleading. is includes a duty to disclose highly relevant information that might infl u- ence the candidate's decision. e representee must have relied, in a reasonable manner, on the negligent misrepresentation. e reliance must have been detrimen- tal to the representee, in the sense that damages resulted. e reasonableness of the candidate's reliance on the employer's pre-hiring representations is often a factor in neg- ligent misrepresentation cases. In Grant v. Oracle Corporation Canada Inc., for example, the court found that the em- ployee had not relied reasonably on the employer's representations regarding its projected sales, and remarked that the employee was "a seasoned veteran" in the fi eld and "was aware of the opportunities in the marketplace." "( e employee) made an independent investigation of the information provided to him and was cautioned on the valid- ity of the information," said the court. " ose circumstances give rise to the reasonable conclusion that Grant did not rely on the sales fi gures to terminate his employment with Computerland and to join Oracle. ey demonstrate his own optimistic overlook." In Honey v. Star-FM Radio Inc., the employer radio station recruited the employee to leave another radio station, and then terminated his employment af- ter only 11 months due to fi nancial dif- fi culties. e employee brought a claim for negligent misrepresentation, arising from representations made by the de- fendant during the hiring process about its expansion plans. e court found the employee had failed to prove that any of the representations made to him were untrue, inaccurate or misleading. In ad- dition, the court expressed doubt about the employee's reliance, fi nding that both the employee and the employer were en- thused and optimistic about the likeli- hood the employee would be successful in his employment, but that both knew they were "taking a gamble." e employ- ee made his own assessment of the risk of accepting employment with the em- ployer and nothing the employer's repre- sentative said to him misled him as to the level of such risk. e reasonableness of an employee`s reliance will be measured objectively. In Douglas v. Unitel Communications Inc., the court rejected the employee's neg- ligent misrepresentation claim arising from changes made to his title and job functions after he commenced employ- ment. e court found that these changes were not contemplated by the employer at the time the employee was hired, and that a reasonable person in the employ- ee's position would not have expected the employer to provide an assurance that there would be no changes to his title or job responsibilities in the future. To avoid exposure to claims based on pre-hiring representations, employers should train their representatives to en- sure that any promises made in the inter- view process are not untrue, inaccurate Pre-hiring representations to job candidates Question: If an employer makes verbal promises regarding the timing of raises and some of the job duties when trying to recruit someone but doesn't include them in the written job offer, is it liable if it doesn't keep all of those promises? 2 | November 7, 2018 Ask an Expert with Colin Gibson Ask an Expert Colin Gibson HARRIS AND COMPANY VANCOUVER ENTIRE on page 7 ยป

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