In M. v. A.C.I., 2025 ONSC 1028, the Ontario Superior Court awarded a dismissed employee 14 months’ reasonable notice after only seven months of employment. The decision is an important reminder that employees who are recruited away from stable, long-term jobs may still be entitled to significant severance if they are terminated shortly after accepting a new position.
The employee was a senior executive in the healthcare software industry with approximately 12 years of service at her previous employer. She was recruited through LinkedIn and encouraged to leave her secure role for a higher-paying executive position that included salary increases, bonuses, and Restricted Stock Units (RSUs). After accepting the offer and leaving her former employer, she worked for the defendant for only seven months before being terminated without cause as part of a workforce reduction.
The employer argued that the employee’s entitlements were limited to four months’ salary under the employment agreement. However, the court found the termination provisions unenforceable because they violated the Employment Standards Act, 2000. In particular, the “for cause” clause attempted to remove termination entitlements in situations broader than the ESA permits.
Because the termination clauses were unenforceable, the employee was entitled to common law reasonable notice instead of the contractual minimum. The court also found that the offer letter’s reference to a “minimum” of four months’ salary was not clear enough to remove the employee’s common law rights.
Why Inducement Mattered
When determining reasonable notice, the court considered the employee’s age, senior position, specialized industry experience, and the fact that she had been actively recruited away from secure employment. The inducement factor was especially important.
The evidence showed that the defendant initiated contact, discussed what it would take to persuade the employee to leave her prior role, and made representations about growth and long-term opportunity. The court found that these recruitment efforts went beyond ordinary hiring discussions and amounted to inducement.
Although the employee had only worked seven months for the defendant, the court awarded 14 months’ reasonable notice. This shows that short service does not always mean short notice, especially where an employee was recruited away from stable employment.
Damages Included More Than Salary
The court awarded damages for more than lost base salary. The employee was also awarded compensation for benefits, bonus entitlements, and RSUs that would have vested during the reasonable notice period.
This is important for employees because severance is not always limited to salary. Depending on the circumstances, severance packages may need to account for bonuses, benefits, commissions, equity compensation, and other forms of compensation that would have been earned during the notice period.
Key Takeaways for Employees
Employees who are recruited away from stable employment should keep records of recruitment discussions, emails, LinkedIn messages, compensation discussions, and representations about long-term opportunities. Evidence of inducement can significantly increase severance entitlements if employment is terminated shortly after the move.
This case is also another reminder that termination clauses in employment agreements are frequently unenforceable in Ontario. Even where an agreement appears to limit severance, employees may still be entitled to substantially more compensation under the common law if the contract violates the ESA.
The decision also confirms that bonuses, stock options, and RSUs may form part of wrongful dismissal damages where they are an integral part of the employee’s compensation package. Employers cannot necessarily avoid those obligations simply by describing compensation as “discretionary.”
For employees considering a new position, especially senior employees leaving secure long-term employment, it may be worthwhile to have an employment lawyer review the employment agreement before signing.
Speak With an Employment Lawyer
If you were recruited away from secure employment and then terminated, you may be entitled to more than the amount offered in your termination package. Monkhouse Law represents non-unionized employees in Ontario and can help you understand your rights before you sign anything.
Contact Monkhouse Law Employment Lawyers for a free 30-minute phone consultation.