So, you’re looking to hire your next account manager, controller or human resources specialist. Your recruitment agent presents you with a list of candidates and you get your assistant to schedule interviews of those who, in your opinion, are worthy of your attention. If your business is anything like many of the businesses around you, chances are you are under the impression that your legal obligations begin only at the date of hire and the interactions that take place prior to that auspicious occasion are legally meaningless. Wrong.
Many businesses that end up becoming our clients are surprised to find out that the employer, in fact, has to abide by various laws and rules of conduct prior to the actual hiring of the prospective employee. Indeed, breaches of such laws often form the basis of costly future litigation down the road.
In view of such concerns, we have decided to list the three main areas of contention employers should be diligently mindful of during the interview and hiring process. These simple pointers, although far from exhaustive, will allow you to modulate at least some of the potential liability that may arise in the future.
1) Don’t discuss anything that may appear discriminatory.
In Ontario, employees and potential employees have the right to not be discriminated against on a variety of grounds under the Human Rights Code including gender, creed, disability, etc. This is a truism of employment law both provincially and across Canada. Thus, any conversation surrounding any such topic is likely to attract questionable motives and is best to be avoided altogether.
To be clear, it is not wrong to discuss a person’s background per se. For instance, if a person lists their former experiences in their native country on their resume, one can reasonably assume that they are inviting the prospective employer to have a discussion about their life and any associated advantages their background may bring to the company. However, as a business owner you should be careful making statements that can be regarded as discriminatory even if that is not your intention. Move on to discuss music and your favourite local restaurant…
2) Don’t induce the employee to leave their former secure employment.
Employees in Ontario are entitled to notice of termination or pay in lieu of notice of termination at common law. The length of notice (or the pay commensurate with such a notice) is normally determined on the basis of the employee’s age, character of employment, the prospect of finding similar employment upon termination and length of service with the terminating employer. There is an exception: if you induce an employee to leave from a formerly secure job…
Employers rightly vie for the experienced candidate during the hiring process, that proverbial “someone who could hit the ground running.” The problem arises when the employer is determined to hire employees who, at the time of the interview, have a secure employment elsewhere. Some employers are so adamant to hire prospective employees to the point that they push the individual to quit their job usually through the making of remarkable promises. This may cost you. If you decide to end the employment relationship relatively shortly after the hiring of the recruited candidate, the employee’s service with the former employer may be taken into account when determining how much termination pay the employee should be entitled to.
As a business owner, you should avoid the above pitfalls. Do not make promises you cannot keep: although good faith display of company confidence and discussion of growth opportunity is healthy and even expected, do not indulge in puffery or grandiose projections that are not rooted in reality. Further (and this is self-explanatory), do not intentionally (or negligently) misrepresent things or state things you know to be untrue. Finally, seek to mitigate these concerns through a written employment agreement.
3) Reduce the terms of your employment with the employee to writing.
Although most verbal agreements are, legally speaking, enforceable, once you have decided to enter into an employment relationship with the candidate, put it in writing. As the old adage goes: a verbal agreement is not worth the paper it is written on. In addition to having clarity of terms regarding standard things such as remuneration, work hours, vacation, duties, etc. a written employment agreement may help diminish significant liability down the road if the relationship reaches its breaking point.
Although not a panacea, a properly drafted employment contract may help limit various common law liabilities including significant pay in lieu of notice. A properly drafted employment agreement should also include an entire agreement clause including wording that clearly sets out that the employee was not induced to leave his or her formerly secure employment, if any. Finally, it is always our recommendation to put an appropriately worded probationary period clause.
As always, each employment relationship is highly fact-specific and any contractual terms should be carefully scrutinized and crafted accordingly.
It is possible that your business is undergoing an exciting phase of growth and expansion and you are looking to hire more talent to your organization. It is also possible that you have experienced the sudden departure of one or more key employees and are pressed to find a replacement immediately. Whatever the case: do it right. The steps you take now and the manner in which you hire the prospective candidate may determine the magnitude of liability your company, or even you personally, may face in the future.