Headhunters – Liable for Huge Damage Claims in the Event of a Dismissal?

Inducing Employers - Be Careful with Dismissals

 

If an employee has a successful claim for wrongful dismissal, the employer is liable for reasonable notice damages. Of course, this is nothing new, but the employment market is constantly evolving, and as such employment law must adapt to keep pace. The importance of loyalty and longevity in the workplace has diminished and it’s rare to find employees who spend the length of their careers with a single employer.

 

Employment mobility is more common now than it has ever been and finding the “best man for the job” has become increasingly competitive. Many companies are looking to recruit those whom are already successfully employed elsewhere.  Inducement occurs when an employee is lured away from their existing prior employment, and encouraged to quit in order to begin working for the inducing employer instead. This change in employment can create complicated legal issues, especially in the event of a dismissal.

 

The courts determine reasonable notice on a case-by-case basis; calculating the amount according to certain factors associated with the dismissal.  They usually include:

 

  • the age of the employee
  • the employee’s position and / or responsibilities
  • the length of service
  • the education, training and experience of the employee
  • the availability of similar alternative employment and level of difficulty the employee faces in obtaining it

The courts now include inducement as an additional factor in determining damages for reasonable notice in wrongful dismissal claims. Even though inducement can be tricky to prove and there are numerous defences in such claims, there are situations where inducement can become the central factor in a dismissal case.  When this happens, inducement may override other dismissal related factors such as length of service with the inducing employer. This can result in an expensive damage claim for an inducing employer, especially if the employee gave up long-term, secure employment to work for the inducing employer.

 

Inducement related dismissal claims are time sensitive. The clearest cut cases involve employees who have only worked for the inducing / new employer for a short period of time. The longer the employee works for the new employer, the less likely it is that inducement will be a significant factor in a case.

 

Inducement and Dismissal - Costly Mistakes for Employers

 

If an employee left a long-term, secure position to work for an inducing employer and that new position didn’t last very long, the inducing employer may be exposed to a dismissal claim for damages.  However, the reasonable notice owed by the inducing employer may not be calculated according to the length of service the employee worked in the new position. Instead, the inducing employer may have to pay the equivalent of the length of service the employee worked in their previous long-term, secure position. 

 

In some cases, inducing employers were severely punished and ended up having to pay for both lengths of service: the induced employment AND the previous employment of the employee.  An example of this would be if an employee had worked for the inducing employer for a period of 6 months at the time of dismissal, but his position with his previous employer lasted over 10 years. The inducing employer might assume that reasonable notice would be based on 6 months of employment, but the courts may decide that it should be based on the equivalent of 10 years and 6 months instead.

 

What happens when a dismissal occurs during the probationary period?   Employees generally can’t claim damages if dismissed during the probationary term, but inducement can override that. The courts believe it is unfair for an employer to induce, then dismiss shortly thereafter and expect to get out of a damages claim.  Such behavior is frowned upon and  there are even cases involving employees who were induced by employers but never actually started the new employment.

 

How can you, as an employer avoid some of the potential pitfalls associated with inducements, dismissals and reasonable notice? The best advice is professional advice. For a detailed look into your unique situation, please contact Employment Lawyer, Bob Yeager.  

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