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By Tony Poland, LegalMatters Staff • An employee owed severance after being wrongfully dismissed has a responsibility to seek new employment but that does not mean they must take just any job, says Toronto employment lawyer Jeffrey M. Andrew.
Andrew, a partner with Cavalluzzo LLP, says when he is representing a wrongfully terminated employee, he advises them to immediately seek “reasonable alternative work.”
Failing to do so during the notice period could result in a court reducing their severance package, he explains.
“Workers are expected to seek a position comparable to what they lost. If, for example, they were a salesperson, they should look for a sales-related job. It is a principle known as a duty to mitigate,” Andrew tells LegalMattersCanada.ca. “However, that duty does not obligate a person to take just anything. If they have a good reason to say the prospective employment was not suitable, then a court is likely to accept that. It is a case-by-case assessment.”
He says the duty to mitigate is a common law principle requiring a worker to minimize the damage they suffered after being terminated. If that employee finds a new job during their notice period, any income earned in their new position could reduce the severance owed by the employer.
Courts have stated employers should not be liable for losses that could have reasonably been avoided by proper mitigation and that the employee has a responsibility to themselves.
‘The duty to mitigate is not a duty owed to an employer’
“The duty to mitigate is not a duty owed to an employer, rather it is a duty an employee owes to conduct himself or herself as a reasonable person,” a B.C. court ruled in Coutts v. Brian Jessel Autosports Inc. “In most cases, this necessarily means that the employee must take reasonable steps to find alternative employment upon dismissal.”
Andrew says what is reasonable can be a matter of interpretation.
He pointed to a recent Ontario Court of Appeal (OCA) judgment that stated that while a worker must seek employment comparable to the position held when they were terminated, it does not mean they have an obligation to seek a lesser-paying job. Nor does it prevent them from applying for better positions than they previously held.
In the case, the court was told a woman was terminated from her position as general manager of a Toronto office where she was the most senior employee. Court heard she waited more than a month from her last day of work before she started her job search and that she applied for positions that represented a promotion over her prior role.
The motion judge reduced the woman’s notice period from eight to six months, ruling that she waited too long to start her job search, she applied to very few jobs and she “aimed too high” when selecting roles.
Job matched her work experience
On appeal, the woman argued she applied for jobs that matched her work experience and qualifications.
In its ruling, the OCA states “the motion judge placed too much emphasis on the titles of some of the positions the appellant applied for, without giving proper consideration to the appellant’s evidence that the positions were similar to her prior work experience.”
“Without evidence contradicting the appellant’s assertion that the vice-president roles had similar job responsibilities to her previous employment, the motion judge speculated, based on the title of the positions alone, that such positions were not comparable,” the court determined. “This error influenced her determination that the appellant failed to take reasonable steps to mitigate her damages.”
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Andrew, who was not involved in the case but comments generally, says courts look unfavourably on terminated employees who wait too long to start a job search.
“If you are involved in a claim, you cannot just sit at home waiting for your case to be decided to collect what you are owed,” he says.
Position held, market prospects will impact search
The position held and job market prospects will no doubt have a significant impact on a job search, says Andrew.
“There is no standard to how long it should take to find alternative employment,” he says. “If you are a vice president, those sorts of positions are not necessarily easy to come by. Whereas if you are in a position where there are plenty of jobs available it would be anticipated that you would be able to find something fairly quickly.”
Ideally, Andrew says, a person should be looking for something that matches their “skillset and experience.”
“The basic premise is what you are trying to do is look for comparable work,” he says. “If you have been searching for an extended period and you have not succeeded you might want to reduce your expectations somewhat.
‘Limit your search to something reasonably comparable’
“That does not mean you should take any job that comes along. If you held a senior position, you would not be expected to apply for a job flipping burgers,” Andrew adds. “You can limit your search to something reasonably comparable. That may not be the same position precisely, but you should keep it to something within the similar sort of range.”
He says there is nothing wrong will applying to jobs that are better than the one you had. However, keep your skillset in mind and broaden your search, if necessary, in an effort to find employment that is attainable and desirable, Andrew adds.
“Whether you have met the expectations of the duty to mitigate will very much depend on the court’s assessment of your efforts,” he says. “It becomes a factual determination about how reasonable you are being or if are you being a bit too limited in your search.
“Always remember to keep good records on where you applied, who you talked to and what the result was,” Andrew adds. “If you take only minimal steps to mitigate your damages you do so at your own peril. But if there is evidence you took reasonable steps, the court is unlikely to micromanage those efforts.”
