The Basic Rule

It is well established that an employment relationship is one which is “special” which requires care and consideration in statements made in the interview process. False or negligent statements made by the employer in this process may give rise to claims for misrepresentation where there has been proven detrimental reliance upon such statements.[1]

Recent Case

The modern decision of the British Columbia Court of Appeal[2] has given fresh attention to this claim.

In this case, the employee suffered from cystic fibrosis when he applied for an engineering position. On these facts, the long-term disability benefits were of clear significance to him. He was given a brochure which contained a provision relating to a clause requiring “proof of good health”. Many disability policies deal with this concept of a pre-existing disability. The plaintiff was assured by the company representative conducting the interview that he would indeed qualify for benefit coverage following three months of consecutive employment.

Soon after his employment had begun, his medical condition required an application for benefits which were approved, but not at the full entitlement level. Instead of receiving the sum of $5,000 per month, his eligible insured payment was $1,000 per month.

The plaintiff succeeded at trial in recovering the sum of $83,000. In an action for negligent misstatement, the damage sum must be based on the sum he would have received from his prior disability insurer with his prior employer. The theory of the damage claim follows what would have happened, had the misstatement not been made.

The trial judge also allowed $10,000 in aggravated damages for mental suffering. The Court of Appeal upheld the damage award but did not agree with this award of aggravated damages.

This case, while clearly one of dramatic reliance upon the misstatement, does reflect the basic concept that oral representations in the interview process are important and may be actionable.

There are, however, ways to avoid these claims, which will be reviewed in a forthcoming post.

Employers’ Lesson

The dramatic impact of the statements in this case are reflective of the need to be careful about oral or written statements which may be important in persuading an employee to leave secure employment. This is unlikely an earth shattering statement.

Employees’ View

When interviewing for a new position, it may be important to record what has been said in the interview process for future reference. If a particular issue is of real concern, the employee may even wish to ask for it in writing. This is a judgment call. The important point is that oral or written representations, which are false or negligently made, may well be actionable.

Get Advice and Know Your Rights

This issue is important to both parties. The employer still may have an “out” by an exclusionary clause to be discussed soon. Legal advice is critical to both sides of this dispute. For advice on this issue from either side, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416 364 9599 to schedule a consultation.

[1] The leading case is that of the Supreme Court of Canada in Queen v Cognos

[2] Feldstein v. 364 Northern Development Corporation