Categories
Constructive Dismissal Wrongful Dismissal

Mitigating Damages in Wrongful Termination: Understanding Your Obligations

When a person is terminated from their employment, they are generally entitled to compensation in the form of termination and severance pay. If there is no employment contract or the applicable contract is invalid, appropriate damages are typically awarded by what the court assesses as the ‘reasonable notice’ period. However, damages for wrongful termination may be reduced in certain circumstances, including when the wrongfully terminated employee fails to mitigate their damages appropriately.

This begs the question: what constitutes the duty to mitigate in the employment context? In other words, what expectations exist of employees who have been wrongfully terminated to mitigate their damages?

In this blog, we explore the duty to mitigate in the employment context, including what the duty entails, who bears the burden of proving that the duty has been fulfilled, and the consequences of failing to satisfy the duty appropriately.

Dismissed Employee Seeks Damages for Wrongful Termination

The case of Wilds v 1959612 Ontario Inc. involved a plaintiff who had been terminated from her position as an executive assistant of the respondent employer after only 4.5 months of employment. Her termination was carried out without cause or notice. The plaintiff, who was 52 years old at the time of the termination of her employment, commenced a claim before the Ontario Superior Court of Justice in which she sought damages for wrongful termination of her employment, including reasonable notice damages, reimbursement of business expenses she had incurred on the behalf of the defendant employer before her termination, and additional punitive and mental distress damages.

The employer countered that the employee was not entitled to reasonable notice damages because she had been provided pay in lieu of notice and further argued that, in the event the former employee was found to be entitled to reasonable notice damages, some amount should reduce such damages to compensate for the plaintiff employee’s failure to mitigate her damages adequately.

Defining the Duty to Mitigate in the Employment Context

In the employment context, the duty to mitigate encompasses an obligation on the part of the departing employee to undertake reasonable efforts to find reemployment comparable to the position from which they were terminated. This is because the departing employee is expected to limit the damage suffered from losing their employment, whether wrongfully or for just cause.

Importantly, comparable employment has been defined by the court to encompass any employment similar to the position from which the employee was dismissed in terms of compensation, status and hours of work.

The Test and Burden of Proof for Mitigation

The burden of proving that a particular employee has failed to undertake adequate mitigation of their damages is borne by the employer, who must prove their assertion on the balance of probabilities, which means a certainty of 51 per cent.

The test for mitigation is bifold and mandates that the employer prove two things: that the employee in question failed to make suitable, reasonable efforts to mitigate and that, had the employee undertaken such reasonable efforts, then the employee in question would have secured comparable alternative employment (i.e., comparable employment was available to the employee, if only they had made efforts to find it).

The burden cannot be discharged simply because the employer makes bald assertions that the employee failed in their duty; rather, the employer must prove that the employee failed to undertake sufficiently reasonable efforts and that, had they done so, they would have secured alternate employment. Thus, even if it can be demonstrated that a terminated employee made absolutely no efforts to find reemployment, this conclusion would have no bearing on the damages awarded unless the employer can successfully demonstrate that, had the employee undertaken reasonable efforts, there were jobs they would or could have been hired for, given their expertise and skillset. As such, and as noted by the courts of Ontario on numerous occasions, the burden is not insubstantial and requires significant evidence on the employer’s behalf.

Did the Employee in this Case Successfully Mitigate her Damages?

In the case at hand, the court was satisfied, upon thorough review of all of the evidence, that the employer had not adequately demonstrated that the employee failed in her duty to mitigate. In particular, the court noted that the employer provided no evidence to support the contention that the employee would have likely secured comparable employment in the months immediately following her termination if only she had undertaken certain steps. Rather, the employer had merely provided a list, attached to an affidavit, of job searches for executive assistant positions within two different time frames; no explanation was provided regarding when or how the search was conducted or from where it had been obtained. Moreover, the printed list omitted full descriptions of the positions listed, making it impossible to determine whether such positions constituted employment comparable to that the employee had enjoyed when working for the defendant’s employer.

The court also noted that the employer, in this case, had persistently refused to provide the employee with a letter of reference or even a letter to simply confirm her employment, which had impeded the employee’s job search in that she had no reference in respect of this period of her curriculum vitae. Furthermore, the employee provided a thorough, extensive ‘mitigation journal’ detailing her months-long job search, including companies and positions she applied to and the dates corresponding to them. In light of the employee’s extensive evidence of her efforts to mitigate and the lack of evidence on behalf of the employer that there were jobs the employee could have secured if only she had undertaken appropriate efforts, the court was satisfied that the employer had failed to prove a lack of mitigation effort on the employee’s part. As such, the employer’s argument concerning mitigation was dismissed as meritless.

Contact Haynes Law Firm for Experienced Employment Law Advice

If you find yourself facing an employment-related issue, whether it involves constructive or wrongful termination, interpretation of an employment contract, or employment discrimination, then you need legal advice to help guide you through the complicated legal process.

At Haynes Law Firm in Toronto, we provide knowledgeable, strategic legal advice to ensure that your rights are protected and your interests advanced throughout the legal process. Contact us online or by telephone at (416) 593-2731 to schedule a consultation today.

Leave a Reply

Your email address will not be published. Required fields are marked *