Any time an employee is dismissed without cause and chooses to sue the employer for wrongful dismissal, the employee is obligated to attempt to mitigate his damages, or minimize his losses, by looking for similar work.
In Michaels v. Red Deer College, the Supreme Court of Canada confirmed that an employee must take reasonable steps to seek comparable employment, and if the employer can show that the employee could have procured comparable employment, the court may conclude that the employee failed to satisfy his duty to mitigate.
On occasion, I am asked by clients whether or not an employee can re-train for another career as a way of mitigating damages. My answer to them is, “it depends.” If there is a shortage of work in the industry and the employee has made a genuine, concerted effort to look for comparable work but still cannot secure new employment, re-training can be an option. However, I do not recommend it as a substitute for a continued job search.
This issue was addressed in Benjamin v. Cascades Canada ULC, a decision of the Ontario Superior Court of Justice. In this case, the employer let go of the employee as part of a company re-structuring. Roughly one month after being let go, the employee, a general labourer with 28 years of service, decided to seek re-training via a six-month welding program. Rather than accept the employer’s offer of a severance package based on approximately 50 weeks, the employee opted to sue for wrongful dismissal.
In its defence, the employer asserted that the employee failed to satisfy his duty to mitigate. The employer provided uncontested evidence that it had three other comparable positions at nearby locations that the employee could have obtained, and was likely to have obtained, had he applied. Following the principles in the Michaels decision, the court rejected the employee’s argument that the employer must show that the employee would likely have procured comparable employment. Instead, the court reiterated that the law simply requires that the employer show that the employee could have procured comparable employment had he taken reasonable steps to look for work. In other words, the employer must provide evidence that there are comparable positions that the employee could possibly be hired for. The employer is not required to prove that the employee would probably be hired.
The court held, “If the employer can establish that the dismissed employee (i) chose to retrain instead of seeking comparable positions, and (ii) could have procured that comparable employment, a dismissed employee ought not to have a “free pass” to change careers to enhance job security or obtain better hours, and then collect damages for notice simply because of dismissal.” The court concluded that when an employee stops making reasonable efforts to look for new work, the employee is not entitled to recover damages from that point onward. As a result, the court dismissed the employee’s case in favour of the employer.
For employers facing a wrongful dismissal action, one take-away from this case is to compile, and even provide to the dismissed employee, a list of comparable positions available in the job market in order to support a mitigation defence. For employees in a wrongful dismissal action, one take-away is that re-training should not be treated as a substitute for a continued job search.
This article is intended only to provide general information and does not constitute legal advice. Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.