The grass isn’t always greener in the other job
Luring workers from other organizations can be costly if it doesn’t work out
Sep 11, 2018
Grass grows by a sand bunker on the 7th green at Augusta National Golf Club in Augusta, Ga., in 2017. REUTERS/Jonathan Ernst
By Jeffrey R. Smith
Do you want the best of the best to work for you? Many employers do, naturally.
Good recruiting efforts can bring in good employees. However, if a worker is a top talent, there’s a good chance that worker is already working for someone. It may take a good selling job to convince top talent to join an organization — but it’s a fine line between a good selling job and overselling.
When employers induce workers to leave existing, secure employment for a position with their own organization, it can open things up for potential consequences if things don’t work out. Inducement can end up being a factor in the reasonable notice liability of the employment relationship is terminated — a factor that can increase notice entitlement, not to mention additional factors that can accompany top talent, such as the availability of similar work, the importance of the worker’s position, and lost prestige. And if the employer made promises that didn’t come to pass, inducement liability can get messier.
Take the British Columbia company that manufactured windows for construction and renovation projects. It really wanted a sales representative for a landscaping construction company to come do sales for it, so it approached the sales rep with a job opportunity.
The company’s sales manager told the sales rep that if he joined the company, he would work primarily with new construction projects — which could bring in big money after an adjustment period of six to nine months — along with a little bit of work in less-lucrative renovation projects. The sales rep was also told he would start with three-per-cent commission for a three-month probationary period to go with a salary similar to the one at his existing job, which would likely be increased to six per cent afterwards.
The worked liked the idea of big commissions from the new construction projects, accepted the job offer, and resigned from his existing employment. In his new position, he started off working on renovation projects but was told he would move to new construction at the end of his probation.
However, the sales manager was dismissed and when the probationary period was completed, the sales rep remained assigned to the less-lucrative renovation projects and his commission stayed at three per cent. About six months after he had been hired, the sales rep’s employment was terminated without cause.
Naturally, the sales rep was unhappy, as he felt he had been induced to leave his previous employment with promises that turned out to be false.
When he filed a wrongful dismissal claim, the B.C. Supreme Court found that the promises that had been made to him were not guarantees but forecasts of potential income if things went a certain way for him.
Though the since-departed sales manager had made promises about specific levels of commission and income, the employment agreement only indicated the commission would be reviewed at the end of the sales rep’s probation.
However, while the company wasn’t bound to the exact promises the sales manager had made to the sales rep, there was no doubt they were “bait” that induced the sales rep to leave his employment at the time to join the company.
This warranted an increase in the reasonable notice period entitlement, particularly considering the sales rep’s age — 44 — and the difficulty in finding similar employment — it took him seven months to find a similar sales job in the construction-related industry. The court found the sales rep was entitled to six months’ notice for his six-month tenure: see Greenlees v. Starline Windows Ltd., 2018 BCSC 1457 (B.C. S.C.).
Six months’ notice isn’t going to break the bank for an employer to pay, but considering it was for an employee only worked for the company for six months, it’s a significant amount. Often employees with less than one year of service are entitled to a couple of months or so, but when the employee was persuaded to leave another job, that can put the employer on the hook for a larger amount.
It can be good for employers to strive to bring in top talent, but they’d better be careful when luring them from other organizations. If things don’t work out in the short term, the employer may have to make a payout as if it was for a longer term.
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Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective.