Mitigation 'the main arrow in your quiver if you're dealing with common law notice'
“It's still worthwhile to argue mitigation and to keep your eye on the availability of employment for a person that has been terminated. You have to question an employee who's perfectly capable to be out there looking for something, when it's to the employer’s favour where the job market is demonstrating that there is a bevy of jobs out there.”
So says Robyn Jarvis, a partner at Harris & Company in Vancouver who practices employment law, after the British Columbia Supreme Court reduced a terminated five-year worker’s reasonable notice award from five-and-a-half months to three-and-a-half months due to his minimal job search efforts.
The 62-year-old worker was a night-shift fuel and scale attendant at The Vedder Transportation Group at its liquefied natural gas station in Abbotsford, B.C. Hired in 2015, his job duties included refuelling trucks, customer service, invoicing customers, yard cleaning, and data entry.
In late 2020, Vedder decided to eliminate all of its night-shift positions. It terminated the worker on Dec. 14 without cause, providing him with two weeks’ notice and two weeks’ severance pay.
After his termination, the worker searched for jobs online through Craigslist, the federal government’s website, and local newspapers. He also said he drove around looking for “help wanted” signs.
The worker applied for three positions over the course of 2021 – two warehouse worker jobs for which he interviewed and a McDonald’s restaurant position for which he didn’t hear back. In March 2022, he found a job as a security worker that he had heard about through a friend.
Sues for wrongful dismissal
The worker sued Vedder for wrongful dismissal, claiming his damages in lieu of common law notice should be on the higher side because of his age, his lack of special education, and the economic downturn during the pandemic – factors that negatively affected his employability, he argued. He claimed seven months’ pay in lieu of notice.
Vedder pushed for a lower damage award of two to three months, arguing that the worker’s skills – which the company characterized as “general labourer, warehouseman, and cashier” – were highly transferable. It presented a number of jobs for which the worker should have applied and argued that the worker didn’t make reasonable efforts to mitigate his losses from termination.
Read more: Mitigation income may not be deducted from reasonable notice damages if the new job is inferior, the Ontario Court of Appeal found.
Vedder’s evidence of several positions that were available, and to which the worker could have applied, was a sound strategy that exposed the worker’s lack of mitigation efforts and helped reduce the award, says Jarvis.
“The key there was that they had a bunch of different positions that they had searched for, and this is something we are recommending that our clients do,” she says. “Have somebody, perhaps in HR, that is assigned to do a consistent search – maybe weekly or bi-weekly – of the well-known job databases for similar types of jobs, so that you've got some helpful evidence in support of a failure to reasonably mitigate argument.”
“They probably were also successful on getting that evidence from the [worker] that he didn’t apply for more than three jobs,” Jarvis adds. “So it's important to really put that pointedly to the [worker], both in discovery as well as ultimately in cross-examination, because they're going to be in a difficult position if they don't have a track record of having made reasonable efforts.”
Low-skilled doesn’t mean interchangeable
The court found that the worker’s job was not highly specialized, but that didn’t make it interchangeable with any other position. The worker’s familiarity was with customer service in the fuel industry, which had some uniqueness, the court said.
The court noted that the worker’s age of 61 at the time of termination, his skillset, and the prevailing economic certainties all played a role in a notice period longer than for what Vedder was arguing. The court determined that the worker was entitled to five-and-a-half months’ notice.
The court’s factoring in of the economy was a little surprising to Jarvis, with indications that things have been improving and there are many positions available, but it’s likely that the greater uncertainty earlier in the pandemic influenced the court’s reasons, she says.
“It may be more that the court was looking backwards to the very early stages of COVID, where things were very uncertain, so that might have had an impact on the consideration of the notice period,” says Jarvis. “Although the notice period that they determined was not surprising, from my own experience, given the age and the length of service, the character, the employment and the typical factors that are considered for the assessment of reasonable notice.”
Obligation to mitigate losses
However, the court also noted that the worker had an obligation to take active steps to search for reasonably similar employment. The three jobs he applied for in 2021 along with doing computer searches and driving around was not enough to constitute reasonable searches, the court said.
“The [worker] essentially admitted that he was held back by his own perceptions of his age and employability – to me, that would be persuasive to a judge, because he's essentially admitting he didn't necessarily try that hard,” says Jarvis. “And the court pointed out that he only had evidence of applying for three jobs in 16 months, which is woefully inadequate.”
“You would expect to see a lot more documentary evidence of effort – at the end of the day, the court found that was just not reasonable,” she says.
Given the worker’s skillset and the number of similar and available jobs Vedder presented, the court determined that the worker didn’t make a reasonable effort to mitigate his losses from termination. As a result, then notice period should be reduced by two months, said the court.
Vedder was ordered to pay the worker wrongful dismissal damages equal to three-and-a-half months’ pay minus the termination and severance pay he had already received.
Read more: Employees who want to go back to school or train for a different occupation aren’t exempt from the duty to mitigate, says an Ontario court.
While a lack-of-mitigation discount to a notice award isn’t all that common and isn’t always significant, it’s something employers should look into if faced with a wrongful dismissal suit, says Jarvis.
“It's always worthwhile to argue the mitigation point – really, that's the main arrow in your quiver if you're dealing with common law notice,” she says. “It's important, given the heavy onus [on employers], to take your own steps to establish and create that argument and get that evidence together.”
Jarvis also points to the role employment contracts can play in reducing or eliminating the common law notice obligation in terminations.
“This is yet another example of how you're in a better position, as an employer, to have employment contracts with clauses that give you certainty, so that you're not put into this situation where you're at the mercy of a court to determine what's reasonable notice and what are adequate mitigation steps,” says Jarvis. “And often, we recommend employment standards termination clauses or mitigation clauses – which you don't see very frequently, but there's no reason why an employer cannot have a mitigation clause in a contract.”
See Toy v. 0954516 BC Ltd., 2022 BCSC 1161.
