The recent case of Leeming v. IBM Canada Ltd. includes a
useful review of the law relating to mitigation of damages in the
context of wrongful dismissal. It provides some particularly useful
insights into the issue that arises when the fired employee, unable
to find comparable employment, starts his or her own business.
In this case, the plaintiff was wrongfully dismissed from IBM
from her position as a Senior Managing Consultant. In that
position, she had been responsible for various project management
duties including project scheduling, tracking budgets and
interfacing with clients to ensure deliverables were met.
After eight years of employment at IBM, IBM decided to eliminate
her position and terminated her employment. At that time, she was
60 years old.
In the following four months, she applied for 20 positions in
various industries and job types. She searched job search websites
and spoke to recruiters. She tried to find jobs through
outplacement counselling, by networking with friends and business
contacts and through any leads that those people provided to her.
She created a LinkedIn profile through which she was approached
about potential job opportunities.
She had two job interviews but she received no offers.
When her efforts to find a new position failed, she decided to
start her own business specializing in digital marketing solutions
for small and medium-sized companies. Marketing was not an area in
which she had either experience or training. She obtained a
franchise with a franchisor in that industry but by the time her
lawsuit reached trial over one year later, her business had not yet
IBM took the position at trial that she had failed to mitigate
and was therefore disentitled to damages for wrongful
The court was satisfied that the plaintiff did not fail to
mitigate. The judge found that she had made reasonable efforts to
find a new job and ultimately that her decision to become her own
employer by training herself for a new career as a franchisee, was
reasonable. The judge pointed out that it was easy enough for IBM
to say that she should have stayed in the labour market longer but
in the judge's opinion, she tested the market long enough to
make a reasonable decision to retrain for a new career.
The judge referred to a previous Court of Appeal decision in
which case the court had said that the fact that the early years of
a worker's self-employment did not live up to his monetary
expectations does not mean that this was an unreasonable attempt to
mitigate. A fired worker is entitled to consider his own long term
interests when seeking another way to make a living. His attempts
at mitigation cannot be considered unreasonable just because he
fails to focus exclusively on his short term obligation to mitigate
damages for the sake of his former employer.
The idea of starting one's own business always raises
difficult questions in the context of a former employer's
mitigation arguments. In this case, the plaintiff spent what the
court considered to be a reasonable amount of time and made
reasonable efforts without success. Presumably, her age had
something to do with her inability to find another job.
Nevertheless, the question of when it is safe for a fired worker to
give up the job search and retrain for a new career will always be
a tricky one, since the odds that the new career will pay dividends
during the notice period are usually quite low.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).