I Was Induced To Leave A Secure Job. Am I Entitled To Compensation?

Inducement generally occurs when an employer lures or recruits an individual away from stable employment with the promise of a better job opportunity, for example, a higher paid position, higher level responsibilities and/or better promotional opportunities.

While it is not uncommon during the courtship phase for employers to market the job opportunity, the courts have determined inducement goes beyond ordinary persuasion during the recruitment process. In determining whether inducement occurs, the following factors that will generally be considered:

  • the reasonable expectations of both parties;
  • whether the employee sought out the job opportunity;
  • whether there were assurances of long-term employment;
  • whether the employee did due diligence before accepting the position by conducting their own inquiry into the company;
  • 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
  • the written contract signed by the parties, including the presence of a probationary clause.

Why does inducement matter?

Where an employer has induced the employee to quit a secure job on the strength of promises of a better job opportunity, courts have generally sought to compensate the reliance and expectation interests of terminated employees by increasing the amount of reasonable notice or payment in lieu of reasonable notice (severance) to which the dismissed employee is entitled.

There is no definitive guideline as to how much or even if an employee’s severance claim would be enhanced as a result of inducement. As the Supreme Court stated in the seminal case of Wallace v Union Grain Growers[1],

“…there is a need to safeguard the employee’s reliance and expectation interest in inducement situations. I note, however that not all inducements will carry equal weight determining the appropriate period of notice. The significance of the inducement will vary with the circumstances of the particular case and its effect, if any, on the notice period is a matter best left to the discretion of the trial Judge.”

Generally though, once inducement has been made out, when assessing the severance entitlement, courts have taken into account the dismissed employee’s combined years of service with their current employer and predecessor employer. This can dramatically increase the amount of severance to which the dismissed employee is entitled.

Inducement generally has the greatest impact where a long-term employee has joined a new company at the urging of that company only to be terminated a short time thereafter.

As more time passes and the employee’s length of service with the new employer accrues over time, inducement may have little or no impact on the overall severance entitlement. In other words, the impact of inducement tends to lessen with the longevity of the employment relationship.

Call the Experts

If you were recruited from a longstanding job and were let go shortly after from the new job, contact us at Pak Smith Employment Lawyers today. We can help answer whether you meet the criteria for inducement and what effect it would have on your severance termination package.

Inducement generally has the greatest impact where a long-term employee has joined a new company at the urging of that company only to be terminated a short time thereafter.

As more time passes and the employee’s length of service with the new employer accrues over time, inducement may have little or no impact on the overall severance entitlement. In other words, the impact of inducement tends to lessen with the longevity of the employment relationship.

[1] 1997 CanLII 332 (SCC), [1997] 3 SCR 701

By |2020-09-03T03:55:24-04:00March 12th, 2020|Article, Article-All|0 Comments

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