30 Apr 2014You are offered an attractive job with a rival company. You accept the offer and resign your current position. You even move cities for the new job. Then, just before you sign the employment contract, the bombshell hits. The new company says sorry, but the job is no longer available. You are left high and dry. What legal rights do you have?
Employment law specialist Nathan Luke of Stacks Law Firm says there are legal avenues that could be pursued for compensation. In certain circumstances it might be possible to sue for a breach of contract or on the basis of misrepresentation causing damages.
If a person has been in a high paying job for a long period and then accepts an offer by a competitor, they are burning many bridges. So if the new employer suddenly backs out of the employment contract they leave the person’s reputation in ruins and they could struggle to find another job elsewhere.
Luke cites a case involving a high earning stockbroker who was lured by a recruiter to change firms. The broker resigned, but the new firm reversed its decision and didn’t go ahead with the employment contract.
The broker took the firm to court. The court found that a contract had been created, that the firm had breached it and had made misleading representations. The firm argued it was only liable to pay four weeks’ salary as notice to terminate. But the court ruled the broker would have stayed with his old firm and continued employment if he had not been offered the new job and that he was promised at least 10 months employment in the new job. The court awarded the broker $4 million in damages.
Not everyone can expect such an outcome. Under the Fair Work Act employers can sack a new employee who is still on probation with only one week’s notice. If you are fired in the first six months of a new job, you don’t have the right to bring a claim for unfair dismissal. For businesses with less than 15 workers this exemption to unfair dismissal laws lasts the first 12 months.
One trap is that many contracts will have a restraint clause, so you could be employed for a week or two, sacked on a week’s notice, then be significantly restrained from working for another firm which is a competitor.
Luke advises to carefully check the wording of a new work contract and keep all emails, letters and records of phone calls just in case it is needed.
For more information please see Can I be sacked on probation?
