By Karen Zvulony, Toronto Employment Lawyer
Generally, a Court will award a terminated employee damages for wrongful dismissal based on their years of service with their most recent employer. Past service with a previous employer is generally not a factor that is taken into consideration by the Courts. An important exception to this rule is when the terminated employee was induced (i.e recruited or “head-hunted”) to leave secure long-term employment by their most recent employer.
An Example of Inducement
For example, If an employee was securely employed with Company A for ten years and was not seeking or looking for other employment. One day, this employee receives an unsolicited call from a recruiter working for Company B who advises the employee that there is a great opportunity to work with Company B and urges him to come for an interview. The employee attends the interview and is blown away by the opportunities and promises Company B makes to him. After the interview, Company B makes the employee an offer of employment and continues to actively pursue him until he agrees to accept the position. The employee ultimately resigns from Company A and commences work with Company B shortly thereafter. After one year of employment, the employee is terminated from Company B.
Based on the facts of the above hypothetical situation, a Court would likely find that the Employee was induced or recruited to leave his secure and long-term employment by Company B and the court would calculate his severance based on his combined service with both employers.
In order for an inducement argument to be successful, the evidence must typically demonstrate that the employee was not looking for other work at the time that they were contacted by the new employer. Also, the weight given to the inducement typically lessons the longer the employee remains employed with the new employer. In other words, a Court is more likely to give more weight to inducement in the calculation of damages for wrongful dismissal or lack of reasonable notice if the employee was terminated shortly after starting employment with the new employer (typically less than 2 years), as opposed to if the employee remained with the new employer for a longer period.
Other factors the Courts consider include: the reasonable expectations of the parties, if there were assurances of long-term employment, whether the employee did due diligence before accepting the position by conducting their own inquiry into the new employer and 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. An employment agreement may also be a factor depending on its terms.
Keep in mind that the likelihood for success of an inducement argument and the weight given to it will vary based on the facts of a particular case and is left to the discretion of the Court. Not all inducements are of equal weight when determining the length of the reasonable notice period. Typically, no two situations are alike and the determination of inducement is very fact specific. Terminated employees where inducement may be a factor are urged to seek legal advice.