The duty to mitigate is a well-established common law principle that requires employees who have been wrongfully dismissed to make reasonable efforts to secure comparable alternative employment following their dismissal. If a dismissed employee fails to fulfill the duty to mitigate, either by not reasonably searching for new employment or by turning down a comparable employment opportunity, the court may reduce the amount of damages awarded to the employee.
The dismissed employee is not obligated to accept any job offered to him or her, but will be expected to accept a job offer that is reasonably suited to the employee’s abilities and circumstances. Since dismissed employees are not entitled to be “double paid”, any employment income earned by the employee during the reasonable notice period will be deducted from any damage award made by the court.
The onus is on the employer to prove that a dismissed employee has failed to mitigate his or her damages, and it is a difficult onus to discharge. An employer must show that (1) the employee failed to make reasonable efforts to find new employment, and that (2) if the employee had made such efforts, he or she would have secured new employment.
In Steinebach v. Clean Energy Compression Corp., 2015 BCSC 460 (CanLII) a 49-year-old employee was terminated without cause after 19.5 years of employment. The plaintiff had started working for the defendant employer as a service technician, but had gone on to hold a number of other positions with the employer. At the time of termination, the plaintiff had been promoted to the position of Vice President, Business Development Canada, which was a sales role with no direct supervisory responsibilities but that nonetheless required specialized skills and expertise.
Considering the plaintiff’s age at the time of termination, length of employment, level of expertise in the compressed natural gas industry, and the fact that the plaintiff had held several senior-level positions with the defendant employer in the past, the court held that the plaintiff was entitled to 16 months’ notice.
However, the court also addressed the issue of mitigation and the defendant’s allegation that the plaintiff had failed to adequately mitigate his damages. The plaintiff had been terminated at the beginning of May 2014, and had started to search for new employment in mid-June 2014. After considering the applicable case law, the court determined that the time taken by the employee before starting his job search was reasonable and acceptable.
The plaintiff’s evidence was that by the end of July 2014, he had decided to undergo a career change and pursue employment in the financial management sector. He completed the Canadian Securities Course during August and September 2014 after being advised that a job would be available to him at CIBC Wood Gundy upon completion of the course. He started working as a Sales Assistant at CIBC Wood Gundy in December 2014, eight months after he had been terminated.
The employer argued that the plaintiff had not made reasonable efforts to secure alternative employment, and put forth responding evidence showing a number of available employment opportunities that were in the plaintiff’s community and for which the plaintiff met the qualifications.
The court held that the plaintiff had not made adequate mitigation efforts, as his search for new employment had been too narrow. He failed to pursue available opportunities that fell within his skill set and range of experience and placed a greater emphasis on his personal preferences and career objectives than was reasonable in the circumstances. The court held that if the plaintiff had made greater efforts to find new employment, he would likely have been successful in finding employment in the industry in which he had worked for the majority of his career.
In the result, the court reduced the 16-month notice period by three months to account for the employee’s failure to mitigate.
Given the exceptionally onerous burden of proving a failure to mitigate, it is rare that a court will reduce the amount of damages awarded to a dismissed employee on account of the employee failing to make reasonable efforts to mitigate his or her damages. However, there are limits on what a court will consider reasonable, particularly where there is evidence suggesting that comparable job opportunities were available that the plaintiff, deliberately or otherwise, failed to pursue.
Blumberg Segal LLP acts for both employees and employers in employment law disputes. If you have an employment related issue, we encourage you to contact us.
Maria Constantine is an associate at Blumberg Segal LLP, practicing in civil and commercial litigation, as well as employment law. Maria can be reached at firstname.lastname@example.org or 416-361-1982 ext. 246.