Employees are generally entitled to reasonable notice of the termination of their employment or pay in lieu thereof at common law. Courts usually determine what length of notice is “reasonable” in any given case by considering the factors set out in Bardal v. Globe & Mail Ltd., [1960] OJ No 149 (SC), which include: the character of the employment, the length of the employee’s service, the employee’s age, and the availability of alternative employment given the employee’s training, qualifications and reasonable prospects of finding suitable employment. However, Canadian courts have recognized additional factors that may be relevant to the appropriate notice period in special circumstances.
One such additional factor is inducement. Inducement refers to situations where an employer convinces someone who has secured employment elsewhere to resign from such employment and accept a position with the new employer. Where such an employee is then terminated by their new employer, the inducement will result in a longer common law reasonable notice period.
In Wallace v. United Grain Growers Ltd., [1997] 3 SCR 701, the Supreme Court of Canada confirmed that the fact that an employee was terminated from a position that he or she was induced to accept, and resigned from secure employment in order to do so, should properly be considered in determining the length of reasonable notice. Specifically, where an employer has induced an employee to resign from a secure position by promising career advancement and greater responsibility, security, and compensation with the new organization, a longer notice period will be appropriate.
However, determining whether an employee was truly induced to leave his or her former, secure employment is not always straightforward. The presence of inducement will depend on the circumstances of each case. In Firatli v. Kohler Ltd., 2008 CanLII 35266 (ON SC), the Ontario Superior Court of Justice summarized the factors that are to be considered in determining whether an employer’s recruitment methods amounted to inducement, as follows:
- The reasonable expectations of both parties [Brisebois v. Rideau Carleton RacewayHoldings Ltd., [2003] O.J. No. 3286 (S.C.J.), at para. 28];
- Whether the employee sought out work with the prospective employer [Laszczewski v. Aluminart Products, 2007 CanLII 56493 (ON SC), [2007] O.J. No. 4991 (S.C.J.), at para. 47];
- Whether there were assurances of long-term employment [McCulloch v. IPlatform Inc., [2004] O.J. No.5237 (S.C.J.), at paras. 28 and 29];
- Whether the employee performed due diligence before accepting the position by conducting their own inquiry into the company. [Lascaczewski supra, at para. 49];
- 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 [Egan v. Alcatel Canada Inc., 2006 CanLII 108 (ON CA), [2006] O.J. No. 34 (C.A,) and Bishop v. Beefeater (Niagara) Ltd. , [2002] O.J. No. 4147 (S.C.J.) at paras. 42 and 43]; and
- The length of time the employee remained in the new position, the element of inducement tending to lessen with the longevity of the employment [Bishop, supra, at para. 49].
The above factors will be considered when an employee claims entitlement to a longer notice period due to inducement. Although it is often difficult for employees to know whether their former employer’s recruitment methods constituted inducement due to the number of factors affecting such a determination, alleging inducement where it is a possibility often makes sense, as successful claims can result in significantly longer notice periods than the employee would have otherwise been entitled to.