Canadian Lawyer

September 2021

The most widely read magazine for Canadian lawyers

Issue link:

Contents of this Issue


Page 33 of 51

32 EMPLOYMENT LAW SPECIAL PROMOTIONAL FEATURE Beware the 'inducement increase' when recruiting a new employee Recent decision highlights area of potential additional liability for employers DESPITE A GLOBAL pandemic and growing unemployment across Canada, the market for top talent is fiery hot. Head- hunters can't keep up with demand as employers offer overly generous compensa- tion and benefit packages. But buyer beware! As a recent deci- sion 1 demonstrates, if a new employee is "induced" to leave secure employment and the new employment doesn't work out, this may result in additional liability for the new employer. What happened? Shahram Younesi had been employed as a Project Manager for National Grid USA for more than a year and a half when he was headhunted through LinkedIn by a recruiter on behalf of Kaz Minerals. At the time, Younesi and his family lived in Vancouver, B.C., and Younesi worked both part time in the USA and remotely from his home in Vancouver. Younesi expressed interest in the position and provided information about his exist- ing compensation. He went through several interviews and was ultimately offered the job. The Offer Letter he signed provided that he would be assigned to the 'Peschanka Project' until September 30, 2020, unless the assignment was terminated or extended on notice. The Offer Letter also included a clause permitting either party to terminate employment on one month's written notice. Significantly, the Offer Letter included a schedule comparing Younesi's current compensation package with one proposed by Kaz Minerals. It identified a substantial increase in salary and vacation, and guaran- teed Younesi to be in Vancouver for the first 22 months — an important perk not offered in his then current role. Younesi accepted the offer, resigned from his employment and started with Kaz Minerals on November 12, 2018. Subsequently, he executed a written employment agreement that stated it super- seded all prior agreements and discussions between the parties, including any "state- ments, representations, proposals, offer let- ters and understandings…." Like the Offer Letter, it included a termination clause that gave either party the right to terminate employment on one month's written notice. Roughly one month after he began work with Kaz Minerals, Younesi was given one month of working notice of termination. Younesi maintained that he had been hired for the duration of the Peschanka Project (roughly two years) and should be paid for that period of time. He sued for wrongful dismissal. Inducement extends the notice period At trial, the British Columbia Supreme Court found Younesi had been hired for an indefinite period; not a fixed term as Younesi argued: It is clear that both parties to Mr. Younesi's employment agreement hoped and expected that he would be successfully employed … for at least the duration of the Peschanka Project …. Both parties expected the duration of that work to last until at least the end of September 2020. However, that expectation does not as a matter of law, convert Mr. Younesi's employment agree- ment into a fixed-term contract. The text of Mr. Younesi's Offer Letter is plain and clear: both the assignment Brought to you by Shana French and Sundeep Gokhale

Articles in this issue

Links on this page

Archives of this issue

view archives of Canadian Lawyer - September 2021