Inducement is a common occurrence in many workplaces around Ontario. It often occurs in situations where an employee has experienced targeted recruitment efforts for them to join a new employer. Inducement does not necessarily have to include intense negative pressure from a new employer or involve deception tactics to “trick” an employee into leaving their job.

What is inducement?

Inducement occurs when an employer lures or “induces” a new employee to join their business from the employee’s old job by offering things like an increase in income, better benefits, a promotion or better work-life balance. Typically, there is a period of “courtship” between the employer and the prospective employee during which the employer makes various promises.

There is no simple formula or test that Ontario courts use to see if there is inducement. The courts will look at entirety of the situation and circumstances between the employee and new employer to see if inducement occurred.

Some key indicators of inducement would be:

• Who approached who? In cases where the new employer approached the employee, it would increase the likelihood of inducement.
• What promises or representations were made by the new employer? In cases where the new employer indicated to the employee that they would be getting more pay, a better role or more job security, would increase the likelihood of inducement.
• How long was the employment with the new employer? The shorter the period of employment with the new employer, the greater the likelihood of inducement to be a factor in calculating the employee’s damages upon dismissal.

Why does inducement increase a dismissed employee’s notice period?

In cases involving the termination of employees in Ontario, courts will look at whether inducement is an issue in deciding what the reasonable period for notice must be. For instance, if an employee had a long employment period with a former employer and a new employer induced the employee and then dismissed that employee shortly after his or her hiring, the new employer may be liable to give greater pay in lieu of notice because of the employee’s length of service with the former employer. Generally, the greater the service period with the former employer, the more Ontario courts are willing to provide a longer notice period or pay in lieu thereof to the employee.

A possible complicating factor in an analysis of inducement is the employment contract.

A possible complication in an analysis of whether inducement would be a factor in increasing the notice period upon termination would be existence of an employment agreement with a valid and enforceable termination clause.

The purpose of termination clauses in an employment contract is to set out when an employer can fire an employee and what the employee’s entitlements will be upon termination. Employers often seek to limit an employee’s entitlement upon termination to the statutory minimums as set out under the Employment Standards Act. If the termination clause is unenforceable, the employee’s entitlements at termination would typically be reasonable notice at common law which would then include the factor of inducement.

How can Zeilikman Law help?

To assess whether an employee may be entitled to damages from inducement, contact one of Zeilikman Law’s employment law lawyers today to set up a confidential consultation to discuss your options and next steps.

For more information about inducement in the employee and recruitment context, please explore our blog, “Recruited by another company in Ontario and then fired? Learn about your employment rights upon termination.”

Zeilikman Law can be contacted online here or via telephone at 905-417-2227 to schedule a confidential consultation.