Following a Wrongful Termination: Employee’s Duty to Mitigate

To the Employee,

 A sudden termination or dismissal is probably your worst nightmare.

“Why did I get fired? What do I do now?” You may feel frustrated. You may wish to seek legal advice. You may want to go to Court. While this is your personal choice, your responsibilities do not end at the notice of termination, nor does it end at filing papers for Court. You must mitigate your situation with all reasonable efforts. What does this mean though? Let me explain it to you.

Canadian law requires employees to mitigate damages following termination. This means that, although you have been terminated and are entitled to notice and damages, you are responsible to make all reasonable efforts to obtain new employment. Then, what does “all reasonable efforts” mean exactly? How does one satisfy this?

The British Columbia Court of Appeal reiterated the principles on the employee’s duty to mitigate damages after termination in Steinebach v. Clean Energy Compression Corp. Failure to mitigate all reasonable efforts may subtract from the damages to be awarded.[1]

A closer look at recent case law indicates that merely accepting a job does not always satisfy the reasonable efforts requirement in mitigating a wrongful termination claim. In another British Columbia case, Schinnerl v. Kawntlen Polytechnic University,[2]the BC Supreme Court clarified that accepting part-time work when being offered a full-time position constitutes as a failure to mitigate.

The plaintiff Ms. Schinnerl was dismissed without cause after 8.5 years of service at Kwantlen Polytechnic University (“Kwantlen”). At termination, she was offered continued salary and benefits for 10 months after. However, this offer was only available until she found alternative employment. Ms. Schinnerl was also required to make all reasonable efforts to do so. If she found alternative employment in the public sector that paid less than what Kwantlen paid her during her employment, Kwantlen would pay Ms. Schinnerl the shortfall.

Around three and a half months after her termination, Ms. Schinnerl found employment with Douglas College. She was offered a full-time position, but she negotiated for a part-time position. Had she worked full-time, she would have earned more than she had at Kwantlen. Yet, she chose to forego the full-time position so that she could pursue her doctoral studies concurrently. It was in her interest to do so; however, it was not reasonable efforts to mitigate the situation. As a result, the Court found that she failed to take all reasonable efforts to mitigate the damages arising from the termination, and as a result, Kwantlen’s obligations ended when Ms. Schinnerl commenced work at Douglas College.

Perhaps the most important note to extract from the Schinnerl case was that even when the employee makes “all reasonable efforts” to find comparable work after a dismissal, he or she has to accept it when the opportunity arises in order to satisfy the duty to mitigate.

Alternatively, the dismissing employer may choose to re-employ the employee in another position. Given that the work is not demeaning; the conditions and salary are not substantially different; the relationship between the employer and employee are not sour; it may be within the reasonable efforts required for the employee to accept the re-employment.[3] If the work or the salary is substantially different, then the employee is not obligated to accept it.[4] The key here is that the new job or position has to be of comparable salary and conditions.

If you are stuck in a situation where you have bills to pay and cannot find comparable employment despite exhausting all reasonable efforts, you may choose to work at a relatively inferior or menial or merely less-paying job for the time being. The Court understands that sometimes this may be the case and will not classify or deduct the earnings as mitigation of damages.[5]

In summary, after you have been terminated, you must make all reasonable efforts to show that you are trying to mitigate the situation. It is not about finding a job that has the exact same conditions or salary, but rather something comparable. If you experience genuine difficulty in finding something comparable, it is understandable. The Court will not hold it against you. However, you must be able to show that you have and are making all efforts to do so.

To the Employer,

Once you have been served with a claim from an ex-employee, you must start gathering information in relation to the employee’s mitigation efforts. The onus is on you. You have the burden to prove that the employee has failed to mitigate his or her damages reasonably.[6]

In the previous paragraphs, I have outlined cases that articulate what reasonableness constitutes. If the employee is being offered a comparable job with similar or better pay and/or conditions, they are obligated to accept it, as that is “reasonable.” The key here is the offer. Not accepting the offer or opting for lower paying offers because of personal preference or objectives would be garnered unreasonable and a failure to mitigate. However, if the employee genuinely cannot find a comparable job and accepts a less-paying job in the meantime to pay his or her bills, that is still considered reasonable with respect to mitigating their situation.

If there is evidence that the employee has failed to mitigate, the Court may find that the employee is not entitled to damages or reduce the damages rewarded. Reduction in damages would be based on the period when the employee has failed to mitigate. As ruled in Schinnerl v. Kawntlen Polytechnic University, the employer’s obligation ended when the plaintiff obtained new employment.[7]

 

[1] Steinebach v. Clean Energy Compression Corp., 2016 BCCA 112 [Steinebach].

[2] Schinnerl v Kwantlen Polytechnic University, 2016 BCSC 2026 [Schinnerl].

[3] Evans v. Teamsters Local Union No. 31, 2008 SCC 20.

[4] Fillmore v. Hercules SLR Inc., 2017 ONCA 280.

[5] Brake v PJ-M2R Restaurant Inc., 2017 ONCA 402; MacKenzie v 1785863 Ontario Ltd., 2018 ONSC 3442.

[6] Steinebach, supra.

[7] Schinnerl, supra.