Consider the situation: You are happily employed and not looking for a new job when suddenly, an employer approaches you with an irresistible offer. They promise career growth, job security, and better compensation, convincing you to leave your stable position.
But months later, you are unexpectedly fired. The promised stability vanishes, leaving you without a job and regretting the leap of faith. This is where the inducement in employment law comes into action.
Inducement happens when a company actively attracts an employee from a stable position with enticing offers, only to terminate them shortly thereafter. Courts recognize that employees who quit steady jobs because of such pledges deserve further protection. In wrongful dismissal instances, incentive can impact severance benefits, sometimes resulting in increased compensation.
In this blog, you will explore inducement in employment law and what it means for dismissal.
What is Inducement?
You might be interested to know that inducement refers to an employer actively recruiting employees to leave their secure position and join their business, usually using incentives such as higher compensation, job stability, promotions, signing bonuses, or other appealing benefits. However, inducement occurs when a person is quickly terminated after joining a new organization.
What Does it Mean to Get Dismissed?
To remove someone from employment, especially if they have done something wrong. In simpler words, to dismiss someone for incompetence.
5 Important Points for Legal Test for Inducement and Its Rights
There are many important points for legal tests for insurance, along with rights, among which five are below:
The Reasonable Expectations of the Employee and Employment
Usually, in cases of inducements, legal courts check the expectations of both parties while hiring. Also, employees may believe they are offered credibility and stable career advancement. While employers also expect a specific level of dedicated work and growth. If these expectations do not match, disagreements may ensue. The law evaluates whether the employee has reasonable grounds to believe in long-term security due to the employer’s acts, promises, or representations. Understanding these expectations helps assess whether an employee was induced and what rights they may have if their employment is terminated prematurely.
Who Initiates the Contact Between the Employer and the Employee
A key element in testing inducement includes a process of identification for hiring decisions. Usually, when employers choose a candidate, they offer better terms and attractive offers, which strengthens the case for inducement.
Beyond this, the argument for inducement weakens if the employee independently applies for the position without any external encouragement. Courts examine if the employer’s efforts were sufficient to persuade the employee to leave their previous position. The effort an employer puts into recruitment can influence whether legal rights apply in the event of an unexpected termination.
Whether There Were Assurances of Long-Term Employment
One of the most substantial chances of inducement occurs when the employer provides explicit or implicit assurances of job security. Statements such as “this is a long-term opportunity” or “you have a bright future with us” can create an expectation of stability. If an individual leaves secure employment based on such guarantees, only to be fired shortly thereafter, they may have legal grounds to file a claim.
Courts will scrutinize correspondence, such as emails, verbal pledges, and contract conditions, to establish whether the employer’s assurances influenced the employee’s choice to change jobs.
Whether the Employee Did Their Due Diligence Into the Company Before Accepting the Position
You need to know employees are expected to conduct reasonable research before accepting a new job. This includes reviewing the company’s financial stability, workplace culture, and industry reputation.
However, if an employer offers inaccurate or insufficient information, the employee’s capacity to make an educated decision may be impaired. If an employer purposefully minimizes risks or conceals harmful elements, the employee may be able to sue. Courts assess whether the employee had access to reliable information and whether they reasonably relied on the employer’s statements in reaching their decision.
The Nature and Extent of Persuasion During the Hiring Process
The employer’s persuasive level is crucial in inducement instances. If an employer actively pursues a candidate with many offers, cash incentives, or promises of professional advancement, this increases the case for inducement.
Offering relocation aid, bonuses, or making inflated claims about job security can all be considered persuasive strategies. The law examines how actively an employer persuaded an employee to leave their previous position. The greater the persuasion, the more compelling the case that the employee was enticed under false or deceptive pretenses.
What to Look for in the Employment Contract When You are Being Recruited
While the Employment Standards Act, 2000 provides fundamental minimum rights for many Ontario employees, employers often provide employees with even greater rights through a contract (for example, a wage higher than minimum wage, more vacation days than the minimum standard, etc).
It may not always be evident what is in the employment contract. You may even think you don’t have one. Employment contracts frequently do not include “Employment Contract” at the start and are often composed of multiple documents.
For example, a role may be offered verbally or via email, and what was said or written during that transaction may become part of the employment contract. The contract may also include a formal offer letter or other contract documents.
Employment policies and other documents can be incorporated by reference. For example, an offer letter may include that the employee is entitled to four weeks of vacation, which the company’s vacation policy will schedule.
How to Minimize the Risk of a Finding of Inducement
Most employers safely avoid the risk of inducement by never being the ones to start contact and never persistently pursuing a deserving employee. This is not eminently practical advice for the realities of credible recruitment.
To reduce the dangers connected with enticement, businesses should avoid broad claims of job security or long-term employment throughout the hiring process, and all promises made must be truthful and enforceable.
An employer also wishes to have an employment contract with enforceable probationary and termination provisions.
An enforceable probationary period agreement will show that there was no reasonable expectation that the new employment would be secure or long-term. An enforceable termination provision that clearly states what an employee is and is not entitled to upon termination (for example, not entitled to common law reasonable notice) would also help avoid enticement from “bumping up” an employee’s notice right upon termination.
Overall, companies should be wary about making specific promises while attempting to recruit someone another organization currently employs. Still, a well-drafted employment contract made with assistance from Dharsi Law can significantly reduce the danger of inducement when such hunting happens.
What Happens to Employees Who are Induced and then Wrongfully Dismissed?
If you decide to start a new job, things may not always go as expected. Many employees presume job security, but unexpected developments can leave them unsure of their rights. Most non-union Canadian employees have a common-law entitlement to reasonable notice or compensation in place of reasonable notice. This right promises employees will leave financially vulnerable if fired without cause.
Several variables have been discussed previously, which determine what constitutes reasonable notice. These considerations occur when employees reach a specific old age after a duration of service, are present in a particular type of position, and have the availability of comparable employment. Each of these factors is critical in evaluating how much notice or pay an employee is entitled to receive.
Days of service can be particularly challenging to assess when an employee has been induced from previous secure employment.
A key question arises: Does length of service only reflect the employee’s time in their current role, or does it also incorporate their previous service?
In some cases, employment contracts specifically recognize prior service, ensuring continuity for the employee.
Conclusion
Inducement can seriously affect employees who leave stable jobs based on false promises. If you find yourself in a situation where you were recruited under misleading terms and then wrongfully dismissed, you may have legal rights to claim compensation.
Understanding the legal test for inducement is crucial in protecting your rights. If you believe you have been induced and unfairly terminated, seeking legal advice can significantly affect your case.
Contact Dharsi Law today to discuss your situation and ensure you receive the fair treatment and compensation you deserve.
