February 5, 2003 by Israel Foulon LLP
Question: I realize inducing an employee to leave a secure position can leave me liable for paying greater notice, but at what point is it considered to be inducement? For example, I post an ad in the paper and prospective employees apply for the position. I interview many candidates and tell them what our company is offering. When I offer the job to the potential new hire is this inducement?
Answer: You are correct when you state in your question that an employer is potentially exposed to greater liability when it induces an employee to leave secure employment to come and work for it.
But leaving a secure position with another employer is necessary but not sufficient to give rise to a finding of inducement. If the employee was willing to leave her previous employment for reasons other than the employer actively encouraging her to do so, there is no inducement. In other words if the employee is what has been described as a “willing seducee” this will militate against an extension of the notice period based on a consideration of inducement.
There must be a significant degree of enticement of the employee in order for a court to increase an employer’s liability on this basis. The situation outlined in your question simply does not amount to the kind of behaviour on the part of an employer which is required for a court to award a lengthening of the reasonable notice period because of inducement.
Clearly, as an employer, it is necessary to seek qualified employees to fill positions within your organization. Putting an advertisement in a newspaper in order to attract such candidates and then telling them in an interview about what the company is offering, is a necessary part of this process. These actions do not reach the level required to put the inducement factor into motion.
Some steps which employers can follow in order to protect themselves from claims for an increased notice period based on inducement are:
- Do not misrepresent the position to the employee by, for example, promising future promotions, increased salaries, job security or other benefits which may not materialize;
- When a new employee is hired, ensure a written employment agreement is signed which clearly sets out that the employer will not take into account the employee’s service with her previous employer upon termination of employment, regardless of any secure employment she may have left;
- Be careful not to recruit new employees too aggressively; and
- Set out a specific notice period in the employment agreement at the outset of the employment relationship.
Peter Israel is the senior partner in the Toronto law firm of Israel Foulon LLP – Employment and Labour Lawyers. He can be reached at 416-640-1550 or pi@qtw38575.mywhc.ca. A version of this article originally appeared in the Carswell publication, Canadian Employment Law Today