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ARTICLE · 05 NOVEMBER 2024

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Employers: Stop Using Offer Letters

Cassels
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It is common practice for many employers to provide new hires with an initial offer letter setting out only a summary of certain key terms followed by a more detailed employment agreement...

CanadaEmployment and HR
Michelle McKinnon
Michelle McKinnon
Kailey Hubele
Kailey Hubele
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It is common practice for many employers to provide new hires with an initial offer letter setting out only a summary of certain key terms followed by a more detailed employment agreement to govern the employee's employment. This is not a practice that we recommend, as demonstrated by a recent British Columbia case.

The Supreme Court of British Columbia (the Court) in Adams v. Thinkific Labs Inc., 2024 BCSC 1129 (Adams) confirmed that where an offer letter sets out the substantial terms of employment and is accepted, the offer letter will be a binding employment agreement. This means that any subsequent employment agreement will require fresh consideration to be enforceable.

In Adams, the employee accepted an initial offer which set out certain terms of her employment, such as her compensation, benefits and vacation entitlements (Offer Letter). The Offer Letter did not include any provisions governing the employee's entitlements on termination of employment.

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