Torah

Canceling a Prearranged Service Under Jewish Law

November 19, 2009

Question:

If you order a babysitter, taxi driver or any other person to work for you, may you cancel the arrangement before the job begins, and what are the financial consequences if you do so?

Answer:

Reneging on a verbal commitment

The Talmud (Bava Metzia 49a) forbids one to back out of any commitment upon which someone else is relying, even if the commitment is merely verbal (with no contract signed), unless the other party clearly did not expect the commitment to be fulfilled. So, for example, if one tells a friend that one intends to give him a small gift, one may not renege on this promise. If however, the gift promised is considerable, such that the intended recipient doesn’t really expect you to carry out this undertaking, you may back out of this commitment.

Included in this type of commitment is an employment agreement (Shulchan Aruch, Choshen Mishpat 333:1). Once you have committed to an employee to hire him, you may not renege on that commitment, unless unforeseen circumstances force you to back out.

What about a fluctuation in the price – you agree to hire a worker, but, before he begins work, the market price for such a job drops and you could now hire someone else for less?

There is a difference of opinion amongst the Poskim if one may back out under such circumstances (ibid 204:11), but there is a Halachic basis for those who wish to so do. Even if the price didn’t actually change but one found someone else who is willing to work for less, there is room for allowing the prospective employer to renege on his commitment (cf Sm”a, Ch. M. 333:1).

Nonetheless, such practice is frowned upon in Halacha (ibid) because of the aggravation caused to the worker, and the prospective employer is expected to appease the employee – an apology is certainly in order, and a token financial compensation would not be out of place.

Causing a loss of potential earnings to the employee

What if one reneges on an employment agreement at the last moment, such that the employee is no longer able to arrange for himself other employment for this time period? For example, a woman arranges for a babysitter to come one evening, who subsequently turned down other requests for babysitting for that evening, and then the woman phones her at the last moment to cancel. Or a school that hires a bus driver to drive the children every day for the school year; based on this arrangement he turns down other offers for work, and then the day before the school year begins the school backs out, leaving the driver unemployed for the whole year?

If the employee can now find alternative work elsewhere, he has no financial claim against the first employer, although he is entitled to complain that he was caused extra trouble to find his new employment.

If, however, he is now stuck without employment, then it depends if he would have had alternative employment if not for this offer. In the event that he would not have been able to get another job anyway even if this employer hadn’t promised him a job, he hasn’t actually suffered any financial loss from the employer’s on/off shenanigans. If, though, he can prove that he would have had alternative employment, which he turned down because he had already committed himself, the employer must pay his wages for the period agreed upon, even if no contract had been signed and the employee had not even began working (Choshen Mishpat 333:2)!

Po’el Battel

Nonetheless, the Halacha recognizes the fact that the employee did not, in fact, do any work, and can surely not claim full wages whilst being “on vacation” (“Po’el Battel”). The Halacha, therefore calculates the loss caused to the prospective employee to be the equivalent of how much he would be willing to receive to not have to work for the time period discussed.

A taxi driver, for example, might take $100 a day for his services. To take the day off, though, he may well be willing to accept only $60, bearing in mind that he would not have to work and would save money on gas, wear-and-tear of his cab etc. So for him, to work all day and receive $100 is equivalent to taking the day off and receiving $60.

In such a case, someone who would book this driver for a day’s work, and would cancel at the last moment, leaving him without employment for the day (assuming that he would have found other similar employment had he not been committed to the first employer) would have to pay the driver $60 for the loss that he caused him.

It must be stressed, however, that all of the above applies only in the event that the employer reneged on his commitment before the employee began working, and in the absence of any signed contract or other act of kinyan. Once the employee has begun working (such as the taxi driver beginning the journey), or even if he hasn’t yet begun working but has signed a contract, the employer cannot renege on the agreement without adequate compensation. The amount of compensation and the circumstances in which the employer might yet be able to back out of the employment agreement will be discussed in a later article, iy”H.


Rabbi Yehonoson Dovid Hool is a member of the Kollel Choshen Mishpat – Institute for Dayanim, Jerusalem, Israel, and its affiliated Beis Din, “Nesivos Chaim”

This series is intended to give general guidelines only; since every circumstance is unique, actual cases should be referred to a Dayan or Beis Din.

The Institute for Dayanim is pleased to answer queries from the general public regarding monetary and business halachah, and to offer advice regarding the drafting of halachically valid contracts, wills etc.

The Institute for Dayanim can be reached by e-mail at beisdin@neto.net.il, or via the website, www.institutefordayanim.com

The words of this author reflect his/her own opinions and do not necessarily represent the official position of the Orthodox Union.