Consider the following situation. You dismiss a 46-year-old employee who has been in your service for less than 4 years. You aggressively recruited him from a competitor, where he had worked for over 20 years. He relocated to take the position with your company. How much notice is the employee entitled to upon dismissal?
If you follow a rule of thumb approach, giving 1 month notice for each year of service, you may think that a notice period of 4 months would be sufficient. You may look at software applications that predict reasonable notice and court cases involving workers of similar age and periods of service. But these cases are only superficially analogous. Most existing research tools fail to take into account the impact of inducement.
In a case with similar facts to those above, the employee was awarded 24 months’ notice.
Failure to account for the effect of inducement will dramatically understate the length of notice that a court will find to be reasonable.
Employment Foresight’s Reasonable Notice Classifier considers inducement among more than 20 factors
Employment Foresight’s Reasonable Notice Classifier accounts for over 20 relevant factors that have been found to influence court outcomes in reasonable notice cases. We consider the four Bardal factors. But additional facts can impact the determination. For example, employee health is one consideration that helps to inform the Bardal factor of the availability of similar employment. Inducement is a separate factor, aside from the Bardal factors, that courts have held can impact the length of a notice period.
Employment Foresight uses the power of machine learning to find hidden patterns in data and predict how these factors may interact in new scenarios. Our classifier shows that, holding all else equal, courts award longer notice periods where the employer induced the worker to leave previous secure employment. The increase in the notice period may be significant, particularly if the worker was induced from a job they held for a long time and then dismissed after a short term of service with the new employer.
Our machine-learning algorithms produce accurate predictions as to how a court would rule in new circumstances. Take the recent case of Gabriel Paulin as an example (New Brunswick Legal Aid Services Commission v. Paulin., 2017 NBQB 92).
Paulin had been employed in various positions with the Province of New Brunswick since 1981. In 2005, he was induced to leave his position and set up the New Brunswick Legal Aid Services Commission, a separate entity funded through a combination of provincial, federal and private funds. The Commission offered Mr. Paulin a senior position as the director of finance and administration and offered to recognize the vacation and benefit entitlements he had enjoyed in his previous position. In 2009, after 4 years’ service, Mr. Paulin was terminated without cause.
How much notice would a court award in this case? If you take a simple rule of thumb approach based on years of service, Mr. Paulin would receive no more than 4 months (and perhaps as little as 2.5 months). Looking at precedents from New Brunswick where the plaintiff had about 4 years of service, courts tend to award notice periods in the range of 2 to 6 months.
Employment Foresight predicted a notice period of 12 to 13.5 months. The court awarded 12 months.
Employment Foresight correctly predicted that the notice period would be much higher than the rule of thumb. Further, it also suggested that the notice period would be greater than previous cases where employees appeared analogous to Mr. Paulin in terms of length of service. The court stated at para. 68: “In asking a senior civil servant to leave the civil service and the accrued entitlements accumulated over the course of that service, the Commission should have expected to pay out a higher than normal notice period.”
This case illustrates how Employment Foresight’s machine learning can provide more accurate predictions than our competitors. It is imperative to include all relevant information in the prediction, rather than relying on just a few factors. Relying on the outcomes of superficially analogous precedents can be costly.
What constitutes inducement?
Longer notice periods are awarded in cases of inducement to recognize a worker’s reliance and expectation interests. Accordingly, an employer should only be subject to the obligation to provide an increased notice period where the new employer has made strong promises of security in the new employment relationship. The following examples demonstrate what may constitute “inducement:”
- A significant increase in salary or benefits, or a signing bonus. See for example, Evans v. Paradigm Capital Inc., 2016 ONSC 4286 and Asgari v. 975866 Ontario Ltd., 2015 ONSC 7508.
- A promise of managerial responsibility. See for example Gjema v. Mercury Specialty Products Inc., 2012 MBQB 83.
- Cold-calls or unsolicited and persistent recruitment. See for example Butcher v. Protagon Display Inc., (2011) 215 A.C.W.S. (3d) 382 (OSCJ).
- A promise of secure employment until retirement. See for example Baldwin v. Quinsam Coal Corp., 1999 CanLII 4931 (BCSC).
Employers should be aware that making these kinds of promises upon hiring a worker may necessitate a longer notice award if the worker is later dismissed.
How does inducement interact with other factors?
The impact of inducement on the reasonable notice award depends on the other circumstances present in the case. Inducement has a strong effect where the employee’s period of service with the new employer is short. The significance of inducement decreases as the length of service increases. Inducement has an even stronger effect where the employee relocated for the new position.
Employment Foresight is the only legal research tool that uses the power of machine learning to map the connections between all the facts in a reasonable notice case. Our approach allows us to provide accurate predictions based on all the circumstances and nuances of a particular case.
Notice periods can be significantly influenced by whether a worker was induced from secure employment, especially where the worker relocated for their new position.