Canadian Employment Law Today

October 24, 2018

Focuses on human resources law from a business perspective, featuring news and cases from the courts, in-depth articles on legal trends and insights from top employment lawyers across Canada.

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with Tim Mitchell Ask an Expert NORTON ROSE FULBRIGHT CALGARY Have a question for our experts? Email Canadian HR Reporter, a Thomson Reuters business 2018 2 | October 24, 2018 Answer: Inducement in this context is presumed to be a claim from an employee around the time her employment is termi- nated. In this context, inducement arises when an employee is gainfully employed with secure employment and leaves that em- ployment to join a new company. At some point later, the employee is terminated. If the employee successfully claims she was induced, then the appropriate notice period may be substantially increased to account for the period of employment at the past em- ployer. You should be aware of particular cir- cumstances when recruiting someone from another company. Inducement can cause the past employment to be considered as a continuous period of employment for as- sessing the common law notice period. In order to avoid these claims, employers must be attentive from the start of recruit- ment as to the employee's circumstances. If the employee has secure employment at a close competitor, then certain precautions should be taken. First, the recruitment pro- cess should not be too aggressive. To assess your risk, consider whether the employee is applying to an open advertisement or has been specifically headhunted. Applications are easier to defend against inducement claims than targeted recruitment. When recruiting prospective hires, companies should avoid making grandiose promises about the employment opportunity. Another point of risk for inducement in the hiring process is signing bonuses and other financial incentives. Any cash provid- ed at this stage should come with the express exclusion from inducement. Consider with- holding these benefits until a certain target is achieved, or attaching them to a discrete reason such as a car allowance. If signing bonuses are normal for the industry or ex- pected in the particular hiring phase a com- pany is doing, then ensure that nobody from the company makes any representations that the money is offered to induce the person to leave her past employment. Consider the industry of the hire. e more comparable opportunities that exist in the market, the less likely a claim for inducement could be successful. Whereas employees who hold unique roles and have unique experiences may have a greater claim for inducement. Most importantly, the employment con- tract must be drafted carefully and pur- posefully. e contract should have the em- ployee explicitly acknowledge that she was not induced to leave past employment. e choice of the employee should be clear. e contract will also require a clear termination clause, which should set out a provision to expressly limit the notice period required at termination and exclude the common law entitlement. e company should be clear and concise in the terms of the contract, en- suring that the employee understands the meaning of the termination clause. Avoid giving advice to your prospective hire regarding her current employment obligations and encourage her to seek inde- pendent advice. It helps to use a third-party recruitment firm to create a degree of sepa- ration between your own business activities and the new hire, but if this is not feasible then exercise caution. Remember that the risk level is higher with gainfully-employed hires making lateral moves into similar posi- tions and industries. Ask an Expert 2 | Recruiting precautions to avoid inducement claims Question: If a company is interested in recruiting someone from another company, what precautions should it take to avoid potential claims of inducement in the future? Question: How can a company ensure independent contractors are subject to its drug and alcohol policy? Can it require contractors to pay for their own post-incident tests? Answer: Engaging independent contrac- tors can vary in size and scope of the proj- ect and service. Many companies may have their own drug and alcohol policy. If this is the case, during negotiations of the con- tract, a company may simply require that the drug and alcohol policy of the contrac- tor be as robust as their own. In the case where the policy falls short, or where the independent contractor has no policy, then expectations around drug and alcohol use and monitoring must be clear. ese dis- cussions should be incorporated into the onboarding of independent contractors and as part of contract negotiations. If you want independent contractors to be subject to your drug and alcohol policy, your policy must be drafted with them in mind. It should clearly identify who the policy ap- plies to, and the subjects' duties and respon- sibilities under the policy. Every contractor should be provided the policy and given no- tice of the policy. Ensure that your contrac- tors provide the policy to all of their employ- ees or, if feasible, provide it to them yourself or post it in a common area. It is common practice to include contractors as subjects of the drug and alcohol policy, but best practice is to ensure everyone at the worksite is aware of the policy and familiar with the obliga- tions it imposes. Employers have a legislated duty to pro- vide a safe workplace. Whenever there is more than one employer operating within a workplace, spheres of influence can become unclear. If you are operating in a jurisdiction which mandates prime contractor duties, be sure to identify the prime contractor, which increases exposure to workplace risk liabil- ity, and responsibilities in regards to these risks. e prime contractor has an obligation to all employees to provide a safe worksite. If you have determined a drug and alcohol policy is part of a safe worksite, then ensure your policy is drafted appropriately to cap- ture all engaged individuals. Part of an employer's responsibilities is to exercise due diligence in providing a safe workplace. If drug and alcohol misuse and abuse can cause risks to safety in the work- place, then you want to ensure that the policy should include contractors. If you work in a safety-sensitive industry, or if you are engag- ing contractors in safety-sensitive services, you should have a policy in place. With the legalization of recreational cannabis use, there is more reason to give contractors notice regarding your drug and alcohol policy. Positive testing for cannabis is not always indicative of impairment and without ample notice, your contractors may fail drug testing, terminating services. With the variety of cannabis use policies, clarity and transparency will be key for compliance. As part of your engagement with the contractor you should advise them of your drug and alcohol policy and your expectations around legal cannabis use, possession, and testing, so that they may stay or become compliant. For all post-incident testing, best practice is to test only the individuals directly in- volved in the incident. e policy will have to define "incident" clearly. It would be difficult to enforce a provision in your policy which requires contractors to pay for their own post-incident testing without the contractor explicitly agreeing to that provision. If you want your contractor to pay for its testing, you should execute a contract as part of the services agreement or arrange for express and written consent from the contractor. Tim Mitchell practices management-side labour and employment law with Norton Rose Fulbright in Calgary. He can be reached at (403) 267-8225 or

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