Wrongful Dismissal and Mitigation: What is the Extent of the Employee’s Obligation?

By Irvin Schein, Litigation Lawyer, Mediator, and Arbitrator

Originally published at irvinschein.com.

In the recent case of Lake v. La Presse (2018) Inc., the Ontario Superior Court provided some useful guidance concerning an employee’s obligation to mitigate damages when there has been a wrongful dismissal.

In this case, the Plaintiff had been employed by the Defendant for 5.5 years. The employment was terminated without cause and there was no issue as to the fact that the Plaintiff was entitled to reasonable notice at common law.

The matter came before the Court as a summary judgment motion to determine the reasonable notice period, compensation for loss of a bonus over the reasonable notice period, and whether or not the Plaintiff took reasonable steps to mitigate her damages.

The particularly interesting aspect of this case has to do with the mitigation question.

In my experience, it is typical in these cases for former employees to produce evidence of unsuccessful job applications and leave it to the former employer to lead evidence at trial that, had more diligent efforts been made, the former employee would have become re-employed much sooner than actually was the case. Most employers find this to be an extremely difficult task.

In this case, the Plaintiff was the most senior employee in the Toronto division of a company that carried on business as a daily online French-language newspaper based in Montreal. The Plaintiff had ample experience working in sales and sales operations for media companies. She reported to the Vice-President of Sales and Operations of the Defendant, who was based in Montreal. Her duties included client development, training and management of sales teams, and developing and implementing the Defendant’s sales strategies. However, she did not attend weekly executive meetings or participate in setting strategic direction within the organization.

Her employment ended on May 30, 2019. At that time, she was 52 years of age. At the time of the motion, about two years later, she remained unemployed.

The Court noted that the onus is on the Defendant to demonstrate that the Plaintiff did not mitigate damages and that the onus is not a light one. However, where the Defendant overcomes that onus, the notice period can be reduced or eliminated altogether.

The Court pointed out that the Plaintiff was entitled, firstly, to some reasonable period of time before starting the job search in order to adjust to the situation and plan for the future, and secondly, to seek out reasonably comparable work for which she was qualified. However, after a reasonable period of attempting to find similar work, a Plaintiff must, at some point, lower her sights and take a lesser paying job, or use her skills in a perhaps unrelated industry.

Considering the Plaintiff’s position, the Court concluded that the Plaintiff should have been ready to begin her job search after a one-month adjustment period. In the year following the termination, she applied for 11 jobs, nine of which were for a vice president role, which was a more senior title than one that she had ever had. Accordingly, she focused her job search on a role that represented a promotion over her prior role.

The Court found that the appropriate notice period was nine months. In that time frame, the Plaintiff only applied for seven positions, six of which were a vice president role. Her first job application was submitted four and a half months after she stopped working for the Defendant.

Taking these facts into account, and apparently without any direct evidence from the Defendant as to available jobs, the Court concluded that the Plaintiff had failed to properly mitigate her damages. She should have started her search earlier, expanded the parameters of her job search, and applied for more positions in more junior roles. Accordingly, the period of reasonable notice to which she was entitled was reduced by two months.

This case provides the useful reminder as to the seriousness with which the search for alternate employment must be pursued. It also demonstrates that while the onus to prove a failure to mitigate is always on the Defendant, that onus can be met if the Plaintiff can be shown to have acted unreasonably and without proper diligence.

If you would like more information on the topic in this blog or on litigation, mediation, and arbitration services from Irvin Schein, please contact ischein@mindengross.com.