Were you poached from a previous job?
When calculating an employee’s severance entitlement, one of the most significant factors to consider is length of the employment relationship. However, length of tenure with your current employer may not be the only relevant information to consider.
Canadian courts have acknowledged that special protections (in the form of increased severance) can be warranted for employees who are poached from stable prior employment. Consider the following: an employee of 20 years’ service with Company A is convinced to accept employment with a start-up business, Company B, after being repeatedly called by the Company B’s CEO over the course of several months and offered increasingly favourable compensation packages. This same employee then accepts the offer of employment but is subsequently let go by Company B only six months later.
In such a case, it may be possible to bridge together the service with Company A and Company B. The result: potentially a much greater severance payment than what a pure six-month employee might otherwise be entitled to receive.
In describing how the law treats poached employees, the Supreme Court of Canada has stated:
One such factor that has often been considered is whether the dismissed employee had been induced to leave previous secure employment…In my opinion, such inducements are properly included among the considerations which tend to lengthen the amount of notice required. I concur with the comments of Christie et al., supra, and recognize that there is a need to safeguard the employee’s reliance and expectation interests in inducement situations. I note, however, that not all inducements will carry equal weight when determining the appropriate period of notice. The significance of the inducement in question will vary with the circumstances of the particular case and its effect, if any, on the notice period is a matter best left to the discretion of the trial judge. [Wallace v. United Grain Growers Ltd., 1997 CanLII 332 (SCC) at paras. 83 and 85]
Pay special attention to that last line from the Supreme Court: “the significance of the inducement in question will vary…” This is just one reason why, if you have been poached from stable prior employment only to later lose your job, it is critical to seek legal advice to properly understand your severance entitlements upon dismissal.