Last Updated August 22, 2023
What is an Employment Offer Letter?
An Employment Offer Letter allows an employer to formally present a job opportunity to someone. Generally, it contains the key details of a job, such as a job title, start date, and compensation details.
An Employment Offer Letter is also known as a:
- Job offer letter
- Offer of employment
- Employee offer letter
Employment Offer Letters can be conditional, meaning employees must pass specific criteria before getting officially hired. Our template allows employers to customize and add conditions unique to their industries.
Purpose of an Employment Offer Letter
Besides being one of the first steps in hiring an employee, an Employment Offer Letter has a variety of purposes, including the following:
- It allows you to present the most important job details
- It conveys professionalism to your new hire
- It serves as a starting point for negotiation if the selected candidate wants to discuss things like salary or vacation
- It allows employees to confirm their acceptance
- It provides you and your new hire with a written record of the initial agreed-upon employment terms
When to use an Employment Offer Letter
Many employers, including small businesses, use Employment Offer Letters to offer jobs to new employees before they sign Employment Contracts. The offer letter gives the employee vital information to decide whether or not they’ll accept the position.
Alternatively, some employers may use an Employment Offer Letter instead of an Employment Contract when an extensive agreement isn’t required. Employers may use offer letters in this way when:
- Less formality is desired
- The job description is less detailed
- The job responsibilities are less demanding
How to write an Employment Offer Letter
When creating an Employment Offer Letter for someone, the core details you should include are as follows:
- The recipient’s information, including their name and address
- The employer’s information, including its name, address, phone number, and email
- The job title for the position
- The salary or wage being offered, and the frequency of pay periods (e.g., monthly)
- The proposed start date
- Whether the position is full-time or part-time
Depending on the employer and the nature of the position, there may be additional information that you would like to include within an Employment Offer Letter. For example, you may wish to specify:
- The working hours of the position (e.g., 9 am to 5 pm, Monday to Friday)
- The number of paid vacation days offered with the job
- The location of the position (e.g., at the employer’s address or remotely)
- Whether it's a permanent or temporary job (e.g., internship)
- Whether there is a probationary period
- Whether there are any benefits offered with the job
- Whether the offer is conditional, and if so, what steps the recipient must complete
What are the possible conditions in an Employment Offer Letter?
Conditions are the rules and requirements an applicant must abide by and meet to become an employee. Here are some possible conditions an employer may outline in an offer letter:
- Completing a medical assessment
- Signing an Employment Contract
- Passing drug/alcohol screening test
- Passing a criminal record check
- Providing satisfactory work references
- Proving work eligibility
Is an Employment Offer Letter a legally binding agreement?
Yes, an Employment Offer Letter can be a legally binding contract when the following requirements are met:
- Offer and acceptance: The employer makes a job offer. The candidate accepts and signs the letter.
- Consideration: Both parties benefit from the contract. The employer gains an employee whose labour helps them reach their business goals. The employee takes a position that earns them compensation and work benefits.
- Mutuality: Both parties intend to enter a valid, enforceable work contract.
- Legality: The contract’s subject matter is lawful, meaning the job position does not violate Canadian employment and labour legislation.
- Capacity: Both parties have the legal ability and mental capacity to sign the contract.
Employment Contract versus Offer Letter
An Employment Contract outlines complete employment terms, including job responsibilities, compensation, benefits, and more. On the other hand, an Employment Offer Letter is the initial step, outlining key details such as position, compensation, and starting date.
It's vital to recognize that, both these can be documents are legally binding contracts when properly signed or accepted.
What happens after sending an Employment Offer Letter?
Some employers may require the recipient to sign the Employment Offer Letter after receiving it to signify both their acceptance of the job offer and their agreement to satisfy any conditions, such as a background check or drug test.
If the new hire meets all of the conditions, the employer may then use an Employment Contract to detail the full, binding agreement between themselves and the new hire.
During the employment period, the employer may use additional documents to manage their staff, including:
Can an employer rescind an Offer Letter?
Rescinding an offer of employment is when an applicant accepts a job offer from their prospective employer, only to have the offer withdrawn.
Since Canada doesn’t have at-will employment, employers have rules they need to follow when they offer someone a job and then change their mind.
If an employer and an applicant are still negotiating the job details, such as compensation, and can't agree, the employer can rescind the job offer. But, if an applicant has already accepted a job offer and met all conditions, the employer can't just change their mind without possible consequences.
In a 2020 court case, Ontario’s Superior Court determined an employer may be liable for damages if it withdraws an accepted offer of employment or terminates employment without cause and without notice or pay in lieu of notice prior to the start date. In this case, the court determined that an employer had to pay three months’ salary in damages to a wrongfully dismissed person.
So, if an employer wants to rescind an accepted offer where all conditions have been met, they need to work with the applicant (i.e., the employee) to find a solution. A possible solution could be a buyout option.
