Mar 20

Luring a New Employee can be Costly, Toronto Employment Lawyer

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An employee may be entitled to a larger award for wrongful dismissal damages if the employee was induced and then subsequently dismissed.


Inducement occurs when an employee is enticed from their current position either though aggressive recruiting or inflated promises. In order to meet the level of “aggressive recruiting” there must be  significant pursuit, such as contacting a candidate multiple times and encouraging them to leave their current employment. Inducement may also occur when an employee is promised benefits, or an enticement to leave, such as promotions, salary increases, and job security. 

In determining the amount of damages or the length of notice an employee is entitled to upon termination, the courts consider factors such as length of service, age, position, and the availability of similar employment, given the employee’s experience, training and qualifications (these are known as the Bardal factors). 

In addition to these factors, courts have been known to consider other circumstances, such as inducement in determining the length of a reasonable notice period. Courts may calculate the notice period by combining the years of service from the previous company to calculate the notice period or by simply providing an elongated notice period to compensate for the misleading expectations a terminated employee had. 

From a public policy perspective, this is considered because it is unfair for an employee to be wrongfully dismissed after a short period of employment, and thus receive a smaller severance package, after being lured to leave a secure position.

At common law, the Courts have developed a test to determine inducement and the weight it should carry when determining the notice period. This test is found in Firatli v. Kohler, [2008] O.J. No. 2763 (S.C.J.) which held the following must be considered to determine inducement:

a.The reasonable expectations of both parties;

b.Whether the employee sought out work with the prospective employer;

c.Whether there were assurances of long term employment;

d.Whether the employee did due diligence before accepting the position by conducting their own inquiry into the company;

e.Whether the discussions between the employer and hiree amounted to more than the persuasion or the normal “courtship” that occurs between an employer and a prospective hiree; and

f.The length of time the employee remained in the new position, the element of inducement tending to lessen he longevity of the employment.

 

One of the leading cases involving inducement is Egan v. Alcatel Canada Inc., 2004 CanLII 2553 (ON SC). In Egan, the Plaintiff was a senior-level employee who had worked for Bell Canada for approximately 20 years when she was contacted by two former Bell employees who were working for Alcatel, who encouraged her to interview for a position with their new employer. This position offered increased compensation, a signing bonus, stock options, and although it was not expressly promised, both sides anticipated a lengthy period of employment. The employee agreed to take the job but less than two years later she was let go as part of a mass termination. She was offered a severance package of 12 weeks’ pay in lieu of notice reflective of her Bardal factors. 

The Plaintiff sued for additional notice on the grounds that she had been induced from her previous secure position. The Court held that her common law reasonable notice period should be elongated to 9 months to take into her being induced away from secure employment. This amount is significant for a two-year employee, whose reasonable notice period would likely have been less than half of the award had it not been for inducement.

It is important to keep in mind that each individual’s employment situation is unique and what someone can be entitled to upon termination differs on a case-by-case basis. In order to know what you are entitled to upon termination, it is best to talk to a lawyer specializing in Employment Law. 

Please contact Monkhouse Law today at (416) 907-9249 for a free 30 minute consultation over the phone to discuss your options.

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