Employer assistance for the terminated employee (Mitigation)

Mitigation is a two-way street.  While we have discussed in a previous blog post the employee’s duty to mitigate when terminated, the duty to mitigate is a concept that should resonate with employers as well.

While most employers want to use an employee’s apparent failure to take reasonable steps to find alternative employment post-termination as a defence to a wrongful dismissal claim, prudent employers recognize that assisting employees to mitigate can reduce the overall risks associated with wrongful dismissal claims.

When representing employers who have made the decision to terminate an individual, we typically recommend offering post-employment support and outreach to the employee to assist the employee in their mitigation efforts.  Offering services such as outplacement counseling to the departed employee ensures that the employee begins the job search in a timely way, and further has all necessary tools and skills to ensure a successful job search.      As mitigation earnings can set off against entitlements to reasonable notice, timely re-employment (particularly during any period of reasonable notice) ensures cost and risk containment for the employer.

Further, offering post-employment assistance to transitioning employees evidences an employer acting in good faith during the termination process, with due regard to the sensitivities and issues inherent in an employee termination.

In certain situations, it may be appropriate for the employer to offer a new position in the organization to the departing employee either in a different department or geographic region.  In some court cases, the employee’s failure to accept a reasonable offer of alternative employment from the same employer, was ruled to be an unreasonable rejection of an opportunity to mitigate by the departing employee thereby reducing the employee’s entitlement to reasonable notice.

Whether these employer strategies (and the myriad of others available) are appropriate depend upon the circumstances in each case, including the employee in question, the personal relationships at stake, and the anticipated duration of the notice entitlement.

Posted by D. Jared Brown – Lead Counsel

Fired? Get a Job!

If you have been dismissed from your job, there is a duty in contract law which states that you have an obligation to mitigate your damages.  This doctrine means that a dismissed employee must take steps to minimize the losses they suffered as a result of losing their job.  Basically, this means that you need to take steps to look for another job.

The leading case on the duty to mitigate is the Supreme Court of Canada decision of Red Deer College v. Michaels.  In this case, the Supreme Court explained the duty to mitigate as follows:

The primary rule in breach of contract cases, that a wronged plaintiff is entitled to be put in as good a position as he would have been in if there had been proper performance by the defendant, is subject to the qualification that the defendant cannot be called upon to pay for avoidable losses which would result in an increase in the quantum of damages payable to the plaintiff.  There reference in the case law to a “duty” to mitigate should be understood in this sense.

The Court held that the burden is on the defendant to provide proof that the plaintiff failed to mitigate her/her damages:

It seems to be the generally accepted rule that the burden of proof is upon the defendant to show that the plaintiff either found, or, by the exercise of proper industry in the search, could have procured other employment of an approximately similar kind reasonably adapted to his abilities, and that in absence of such proof the plaintiff is entitled to recover the salary fixed by contract.

The Court went on to emphasize that the onus on the employer is heavy, citing a previous decision, because “the burden which lies on the defendant of proving that the plaintiff has failed in his duty of mitigation is by no means a light one, for this is a case where a party already in breach of a contract demands positive action from one who is often innocent of blame.”

Despite the burden being on the defendant to show that efforts were made, plaintiffs have been criticized by the courts for not making enough of an effort. In Chambers v. Axia Netmedia Corp., it was held:

Clearly, the efforts of Mr. Chambers [the plaintiff] were to a large extent confined to reading the local newspaper and forwarding his resume to employers. Although commendable, I am satisfied, by restricting his search to this one vehicle, the effort was too limited. Although there is no evidence as to whether these other efforts would necessarily have produced a positive result, earlier than he was able to find the employment he did, I am satisfied there was, to some extent at least, a failure to take all reasonable steps to mitigate

There are simple steps that a plaintiff can take to demonstrate that they attempted to mitigate their damages in an attempt to avoid an adverse decision like the one in Chambers.  We counsel our clients to keep a running log or mitigation journal outlining all the key events, dates, and information related to their job search post-termination including identifying job search efforts, networking, applications, and other career building steps.  This is typically done in the form of a diary or a calendar.  Second, retain copies of the letters, emails, or any other correspondence you sent in an attempt to secure a position.  Third, diversify your search.  You don’t need to limit to just one means.  You could add yourself to the social networking site LinkedIn, search on websites such as Workopolis, scan the newspapers and attend local networking events in your city.  Further, Human Resources Development Canada (“HRDC”) offers a range of free networking, job search, and outplacement services for qualifying dismissed individuals.  All of these steps will assist you in demonstrating that a genuine effort was made to secure new employment.

Posted by D. Jared Brown – Lead Counsel