By Stephen Dugandzic
In Ferweda v Mercer Celgar Limited Partnership, 2024 BCSC 844, the British Columbia Supreme Court addressed the legal principles surrounding inducement in employment and the obligations of employers during recruitment.
Background
Mr. Ferweda, an operations specialist with 27 years of experience, was recruited by Mercer Celgar from a competitor. The company enticed him with a modest promotion, a $10,000 salary increase, and assurances of superior benefits, greater access to overtime pay, and a commitment to long-term employment. When asked about his commitment, Mr. Ferweda indicated he was prepared to stay for at least five years. However, after less than 2.5 years, his employment was terminated without cause due to downsizing, and he was provided with five months’ severance .
Legal Principles
The court’s decision emphasized several key legal principles:
1. Inducement and Reasonable Notice: When an employer actively recruits an employee from secure, long-term employment by making promises about job security and long-term prospects, this inducement can create an expectation of continued employment. If the employer then terminates the employee without cause shortly thereafter, the court may find that the standard severance is insufficient, and a longer notice period may be warranted.
2. Good Faith in Recruitment: Employers have a duty to act in good faith during the recruitment process. Making representations about job security and long-term employment, only to terminate the employee shortly after hiring, can be seen as a breach of this duty.
3. Reliance on Employer Representations: If an employee relies on the employer’s representations to their detriment—such as leaving a secure job—the court may consider this reliance when determining appropriate remedies.
In this case, the court found that Mercer Celgar’s actions in recruiting and then terminating Mr. Ferweda without cause constituted a breach of the implied term of reasonable notice, given the circumstances of his recruitment and the representations made.
Implications
This decision serves as a reminder to employers that they must be cautious and honest during the recruitment process. Promises made to prospective employees can have legal consequences, especially if the employee relies on those promises to their detriment. Employers should ensure that their recruitment practices do not create unrealistic expectations about job security or longevity.
*Always seek legal advice. The above is for information purposes only.
Stephen Dugandzic received his Juris Doctor degree from the University of Alberta in 2013 and is Calgary-based. He previously practised with Bennett Jones LLP and Taylor Janis LLP before founding YYC Employment Law Group in 2018.