Using employees as recruiters dangerous (Legal view)

Referral bonuses are a great tool, but they can land employers in legal trouble
By Chris Foulon
|Canadian HR Reporter|Last Updated: 04/19/2007

In the war for talent, many businesses are directing their employees to actively recruit former colleagues from past employers. This method of recruitment can have significant advantages, since an employee can serve as a goodwill ambassador who is able to identify desired qualities in individuals she has worked with in the past and use her influence to convince those individuals to consider a new opportunity. The target candidate also has the sense he is getting the “straight goods” from his former colleague.

The use of employees as part of a de facto in-house recruitment service can be problematic, however, especially when employees are being compensated for their efforts. This issue was apparent in the Ontario Court of Appeal’s recent decision in

Egan v. Alcatel Canada Inc.