Dismissing an induced employee

Courts don't award for inducement on its own but it is a factor when determining reasonable notice

Tim Mitchell
Question: If an employee is lured from a senior position with 12 years’ experience at another employer but doesn't work out, what notice would he be entitled to if he is let go during the probationary period?

Answer: Proof that an employee has been induced to leave secure employment to accept a position with a new employer has been clearly recognized as relevant in determining the notice period in a successful wrongful dismissal action.

As pointed out by the Supreme Court of Canada in Wallace v. United Grain Growers Ltd., courts are acting to safeguard the employee’s reliance and expectation interests in inducement situations.

In Wallace, the court cautioned not all inducements will carry equal weight when determining the period of notice. The significance of the inducement in question will vary with the circumstances of the case.

Relevant factors include the nature and duration of the prior employment, the degree of dislocation suffered by the employee for the new job, the nature of the inducements offered and the period of time between the inducement and termination of the new employment. For the most part, courts do not separate the inducement from the overall assessment of reasonable notice. Since reasonable notice is dependent upon a number of additional factors specific to the individual employee, it is impossible to predict the amount of notice that might be called for in this case.

Recent cases indicate a fairly wide range of possibilities.

In Egan v. Alcatel Canada Inc., the Ontario Court of Appeal upheld an award of nine months’ notice for an employee who had served less than two years because she had been induced 20-year employment with promises of increased compensation and job security.

In Taner v. Great Canadian Gaming Corp., the employee was nearing the end of a six-month probation period in a senior management position when it was eliminated as a cost-reduction measure. Although the evidence of luring away was not strong — the worker had been looking for new employment — the employee had moved from a secure job in the United States to take up the position with Great Canadian. Given the employee’s level of responsibility, experience and the fact she gave up stable, secure employment to relocate to Vancouver, the appropriate notice period was set at 10 months.

For more information see:

Wallace v. United Grain Growers Ltd., 1997 CarswellMan 455 (S.C.C.).
Egan v. Alcatel Canada Inc., 2004 CarswellOnt 2873 (Ont. S.C.J.).
Taner v. Great Canadian Gaming Corp., 2008 CarswellBC 179 (B.C. S.C.).

Tim Mitchell is a partner with Laird Armstrong in Calgary who practices employment and labour law. He can be reached at [email protected] or (403) 233-0050.

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