Inducement of an Employee: Risks and Damages

| January 9th, 2017 | No Comments »

Inducement: When pursuing an employee that works for another company, it is important to be mindful that this employee would be sacrificing a number of employment benefits by leaving their employer. This generally includes seniority, potential career advancements with their former employer, job security, benefits and so on. If recruiters are very persistent and aggressive towards an employee of another organization, or use promises such as career advancement, security, or higher pay, then this will be seen as inducement. The law seeks to protect individuals being induced by holding employers liable if the employee is terminated unjustly or too quickly. Thus, when recruiters focus on attracting talent from another organization, employers should be aware of the potential risks.

Risk 1: Increased damages through notice pay

This is problematic an unjust dismissal or constructive dismissal claim. In these circumstances, the employer will owe the employee pay for damages through increased notice pay as a result of the inducement. (Notice pay are damages owed to place the employee in a similar position had he/she not been terminated).

Risk 2: Damages for Misrepresentation (moving costs)

Another concern for employers should be whether the inducement was accompanied by a misrepresentation of the employment offer. The key is to be completely honest about the available position. If certain promises are made, such as advancement, but it is known that such promises are only possible with a budgetary approval, this information must be given before the candidate is hired. If a misrepresentation is made, the employer will be liable for any moving costs the employee incurred in addition to the amount owed through increased notice pay. Of course, this is only an issue if the employee is terminated undeservingly (i.e. termination without just cause) or too quickly. Nonetheless, employers should take the necessary steps to ensure their recruiters are fairly representing employment opportunities to potential candidates.

Factors used to Determine if Inducement Occurred

If the employer is able to show that the employee was not induced or if the employment lasted several years, then it is less likely that damages will be awarded. In summary, some of the factors to determine whether inducement occurred are:

  1. Whether the former job was secure
  2. Whether the employee accepted the offer while there were other better offers available
  3. Whether the employee had to move as a result of accepting the position
  4. Whether the employee was an owner of a business prior to inducement

If you are an employee and feel you have been induced and now find yourself unemployed after a short period, please contact an employment law expert to ensure you are compensated fairly. Employers are also encouraged to seek legal advice for any concerns regarding the risks mentioned above.

Is an Employee Obligated to Provide an Employer ‘Reasonable Notice’ of Resignation?

| November 23rd, 2016 | No Comments »

notice of resignationIt is well known that employers must give an employee ‘reasonable notice’ or pay in lieu upon termination when there is no just cause (i.e. the employee has not done anything wrong to be fired). Conversely, although rarely pursued, an employer has the right to receive ‘reasonable notice’ from an employee planning to resign. Below, the factors for determining ‘reasonable notice’ time for employees will be reviewed with reference to a relatively recent case by the Ontario Supreme Court case [Gagnon v. Jesso ONSC] (referred to as “Jesso”).

Reasonable Notice

For employees, ‘reasonable notice’ is the period of time an employee is required to give their employer before the date they wish to resign. The amount of ‘reasonable notice’ time required from an employee will vary with respect to the importance of the employee’s position and duties. The purpose of ‘reasonable notice’ is to grant the employer enough time to either replace the employee or to adjust in a way that would avoid substantial financial losses. In general, employees with managerial responsibilities are required to provide longer notice periods; however, employees in key non-managerial roles may also be require to provide comparable notice time. Jesso highlighted the relevant factors to consider, which include: the employee’s length of service and the difficulty the employer will face with replacing the employee’s skillset (i.e. the labour market conditions). If applicable, any unique circumstances that would result in the employer needing added time to adjust must also be factored into the notice time.

Jesso Example: 

To illustrate the factors considered in determining “reasonable notice”, consider the example of Jesso v. Gagnon. Gagnon is a heating and cooling company (owned by Pierre Gagnon), and Jesso was a salesperson for nearly 10 years with a mechanical engineering degree. Jesso and his sales partner were responsible for over 60% of the company’s sales, and ultimately, a significant source of Gagnon’s revenue. Jesso eventually resigned after strained relations with his employer. Further, Jesso knew that his sales partner was also planning to resign around the same time, since both were pursuing employment with the same competitor.

Initially, Jesso gave Gagnon 2 weeks of notice but the court ruled that reasonable notice in this case would be 2 months. This is not a trivial amount of notice time. Firstly, Jesso’s length of service with Gagnon did contribute to the 2-month required notice time. The most important factor, however, was his substantial skillset, which is indicated by Jesso’s sales performance. Gagnon could not quickly replace the performance gap that Jesso’s resignation would cause. This was due to Jesso’s skillset in itself, as well as the low availability of comparable employees within this industry – these factors contributed to the length of time Gagnon would need to replace or adjust to Jesso’s resignation. Lastly, there was the issue of Jesso knowing that his sales partner was also resigning near the same time. This was a special circumstance that would add to Gagnon’s difficulty in adjusting to this loss as Jesso and his sales partner contributed to over 60% of Gagnon’s sales.

It is important to understand that the above example is a simplified generalization used to apply the relevant factors for determining reasonable notice for employees. Each case will be influenced by the particulars of the employment relationship and surrounding circumstances. Jesso makes this point clear, as any unique circumstances that may create more difficult for the employer to adjust or replace the employee must be considered. Please seek the advice of an employment law professional if faced with a similar situation.

What You Can Do About A Hostile Work Environment

| October 14th, 2016 | No Comments »

Hostile Work EnvironmentA hostile work environment is distressing for employees and costly for employers. Fortunately, the law provides many ways to combat and prevent hostile work environments.

An employee who is subject to a hostile work environment because of his or her race, sex, age, disability, family status, or any other trait listed in Ontario’s Human Rights Code, may be able to file a claim at the Human Rights Tribunal of Ontario. The Tribunal hears claims related to hostile work environments that are rooted in employee’s protected traits.

An employee who is punished because they reported a hostile work environment to their employer can file a complaint to the Ministry of Labour under Ontario’s Occupational Health and Safety Act. Health and safety law also says that employers must protect employees from workplace harassment which can lead to a hostile work environment. Employees must also have a way to report allegations of harassment, and employers must investigate each employee’s allegation of harassment.

If a hostile work environment makes it intolerable for the employee to report to work, the employee may be able to quit their job and claim constructive dismissal. A constructive dismissal occurs where an employee has been treated so poorly that they are forced out of their job as if they had been fired. The employee quits, but then claims the payments that they would have been entitled to from the employer if the employee had been fired. A constructive dismissal can take place where an employer takes part in creating the hostile work environment, or where an employer does not prevent a hostile work environment.

Employees should not be too quick to quit and claim constructive dismissal, though. Constructive dismissal is very difficult to prove. Where an employee claims to have quit because of the employer’s actions, or lack of action, related to a hostile work environment, the employee must prove that it was intolerable for them to continue working, and would have been intolerable for any reasonable person in their position.

If your employer is simply upholding a reasonable workplace rule or policy, this will usually not be considered a hostile work environment. For example, if you are suspended because you were continuously late to work in violation of your employer’s lateness policy, your suspension would probably not be unlawful.

If you feel that you have been subject to a hostile work environment, you should speak with an employment lawyer before taking any action.

 

Author: Simone Ostrowski, Whitten & Lublin

Constructive Dismissal in Ontario: What Qualifies and Do You Have A Case?

| December 16th, 2015 | 1 Comment »

Constructive dismissalVery simply, a constructive dismissal is when an employer makes fundamental changes to an employee’s job that are unfavourable to the employee. The employee may resign and demand a severance package as though the employer terminated the employment relationship.   Examples of constructive dismissal may include:

  • a demotion
  • pay cut
  • change in work location
  • change in schedule
  • change in job duties
  • intolerable conditions in the workplace, such as harassment, discrimination or toxic work environment

A constructive dismissal may not necessarily be a single fundamental change, but a series of incremental changes that on the whole, represent a substantial change to the employment relationship.

Workplaces are not static. Change is inevitable and it is not uncommon for employees to dislike certain changes to their job. However, not all changes will amount to a constructive dismissal. For example, a change in job location that may entail an extra half hour of commuting time, while inconvenient, probably would not amount to a constructive dismissal. Conversely, a change in location that may add several hours of additional commuting time is more likely to amount to a constructive dismissal.

In order to have a valid claim for a severance package from your employer, the change has to be a substantial departure from the existing employment relationship, and it would be unreasonable in the circumstances to continue working. It is important that you obtain legal advice about whether you have a claim for a severance package before you consider leaving your job.

Author: Jonquille Pak, Whitten & Lublin

Should you accept a demotion due to your illness?

| October 2nd, 2015 | No Comments »

Question:

I was injured at work and subsequently diagnosed with an autoimmune disease, which my doctor says is likely related to the injury but not really provable.   My performance at work has suffered due to this disease, also because of absences due to hospital visits and the like.  I had never been written up before until my injury and now it seems like they are trying to get rid of me. They are essentially forcing me to step down from my management position or I feel like I will be fired.  As it stands now, I have actually agreed to step down, so it may be too late for me to do anything about it, but I feel that I was railroaded into this decision. 

Answer:

You are not required to accept a unilateral demotion, especially if the reason your performance has suffered is related to an illness.  Your employer is required to accommodate your autoimmune disease, and related absences, to the point of undue hardship.  Tell the employer you’ve changed your mind – you are no longer prepared to move into the new job; you want to be accommodated in your existing management position. If they refuse, call a lawyer or the human rights legal support centre.

Based on your individual needs, the experts can guide you step-by-step and provide thorough legal advice.

My Boss Made Significant Changes to My Employment

| August 27th, 2015 | No Comments »

Drastic Changes to My Employment

The concept of an employer making a change to a workers employment is not odd. It’s possibly more common than we think. The issue employees take is the extent and significance of these changes, and this concern has legal merit. Take for instance employee A, who has independently worked in their department, earning commissions based on sales. Suddenly, the employer explains that a colleague (employee B) will be working with employee A, and based on his/her performance, employee A’s commission will be dependent on employee B’s sales as well. Readers of the Globe and Mail are interested in finding out, can an employer legally make such a significant change to their employment?

Claims for Constructive Dismissal

Daniel Lublin, Toronto employment lawyer provides his professional opinion by explaining that the answer lies in determining how significant the changes are to an employee’s work duties and their compensation. An employer must seek the employees consent to the changes or provide reasonable notice of the changes. When changes to an employees work duties and compensation are significant, an employee may claim constructive dismissal and sue for lost wages.

Claims for constructive dismissal are unique on a case-by-case basis. As such, retaining a lawyer to provide you with case specific advice is crucial. Consult with our team at Whitten and Lublin to book your appointment and read Daniel Lublin’s Globe and Mail column and full article Does my boss have the right to change my compensation and work load?

I worked long term and disagree with these changes- what next?

| April 27th, 2015 | No Comments »

I have worked as a courier for 26 years.  This week, my company hired a third party courier company who will handle all courier deliveries.  I have been offered an office job in the lab, which has slightly less pay overall.  I don’t agree to these changes.  Do I have any recourse?  

If your job and responsibilities are going to be substantially different along with a pay cut, this is usually considered as the type of change that you may not have to accept.  You should tell the employer that you disagree with the changes and insist that your job and pay remain as before.  If, after 26 years on the job, they are not prepared to act reasonably with this request,  you could treat yourself as though you have been terminated, by leaving your job and suing for lost wages while you look for another job.

Q&A: Employment contracts and fundamental changes

| April 20th, 2015 | No Comments »

I have an employment contract stating my work location to be downtown. I have been told however that I will now be working for a satellite office which is 20KM away.  This may not seem like a huge distance but with the traffic in Toronto during the morning and evening commute times, I would be in my car for 45 minutes longer in each direction.  This seems unfair.  Do I have any right to reject the change?

You can reject changes to your job that fundamentally alter your working conditions.  This is known as a constructive dismissal.  A new work location is sometimes considered a fundamental change but it will depend on the circumstances.  If your contract guaranteed you a downtown Toronto location and that was important to you, the employer’s decision to change that term should be considered a fundamental alteration.

In a situation like this, you should make it known to your employer that you reject the change.  If the employer will not resume your employment at the downtown location, and insists that you work from the satellite office, you may be able to consider yourself as constructively dismissed, leave the workplace and sue for lost wages while you look for other work.

Does a Paid Suspension Constitute Constructive Dismissal?

| April 16th, 2015 | No Comments »

Constructive dismissal claims are established by proving that a fundamental change in employment has occurred (i.e., working conditions, duties and compensation).  Most notably, a recent court ruling established a paid (non-disciplinary) suspension can constitute constrictive dismissal.

In Potter v. New Brunswick Legal Aid Services Commission, Mr. Potter went on sick leave before the employer completed negotiations to end his contract. During sick leave, the employer recommended that his employment be terminated for cause. Subsequently, Mr. Potter was advised not to return to work and was suspended indefinitely without pay. As a result, he began litigation.

It is normal practice that an employee has an obligation to meet a two (2) part test to prove constructive dismissal:

  1. To prove that there was a breach of contract; and
  2. To prove that the employer shows that they no longer intend to honor the employment contract.

However, the Supreme Court of Canada (SCC) outlined that administrative suspensions are different in that the burden of proof shifts to the employer who must prove that it had authority to suspend the employee. The SCC found that:

a)   The employer did not have authority to suspend Mr. Potter. In fact, they breached the contract since it was an implied obligation that they provide him with work and they failed to act in good faith;

b)    It was reasonable for Mr. Potter to perceive his indefinite and unexplained suspension as an adverse and fundamental change to his contract.

This case comes as a warning to employers who wish to impose an administrative suspension- take extra caution, it can amount to a constructive dismissal claim. In order for employers to protect themselves they should follow these basic guidelines:

  • Ensure that you have the implied authority to give a suspension and that there is a justified and reasonable business reason for giving the suspension;
  • Explain why the suspension is being given; and
  • Reserve your power to withhold work and suspend employees indefinitely for administrative purposes by carefully including this language in employee handbooks, offer letter/employment contract.

Q&A: Workplace Harassment

| April 6th, 2015 | No Comments »

I have been harassed by three of my co-workers in my workplace for one year. The harassment has come to an extreme where I could not take it anymore. As a result, I was unable to sleep at night and have been seeing a doctor. I finally quit my job last week because the screaming and targeting my work was unbearable. I gave the company two weeks’ notice, after which the harassment continued.  Management did nothing although they were made aware of my complaints.  

Employers have a legal obligation to provide a workplace free from harassment.

Harassment under the law is defined as conduct or comments that are known or should be known as unwelcome.  Threats and intimidation, offensive comments and belittling behavior are examples of bullying and harassment.

Not all comments are considered harassment.  You mention the targeting of your work.  Managing your performance and difference of opinion do not amount to harassment.  This is why it’s a good idea to meet with a lawyer to get a formal opinion on whether this behavior crosses the line.

Nevertheless, the obligation to provide a workplace free from harassment requires the employer to take your complaints seriously, do an investigation and take positive action.  It does not matter if the alleged harassment came from management or it was the doing of coworkers, contractors or even customers.

Your facts indicate that not only did the employer fail to address the unwelcome behavior, they ignored it, the behavior persisted and it impacted your health to the extent that you were forced to resign.  This may be considered a constructive dismissal as you were forced to leave gainful employment because of a poisoned working environment and if so, you will be awarded damages while you look for another job and possibly additional damages as a result of the employer’s failure to take your complaints seriously.