As a general principle, employees who have been wrongfully
dismissed have a duty to mitigate their damages by taking
reasonable steps to secure comparable alternative employment.
However, the onus is on the employer to prove a failure to mitigate
and Courts have held that this onus is not easy to discharge. To do
so an employer must show both that the employee failed to make
reasonable efforts to find new employment, and that if the employee
had made such efforts, new employment could have been found.
Notwithstanding this high burden, a recent decision by the
Supreme Court of British Columbia is a rare example where an
employer has succeeded in demonstrating a failure to mitigate,
resulting in a reduced reasonable notice period.
Steinebach v. Clean Energy Compression Corp., 2015 BCSC
460, involved a 49-year-old employee who was terminated after 19.5
years of employment on a without cause basis. The plaintiff
employee had started working for the defendant employer as a
service technician in the compressed natural gas (CNG) industry and
held a number of positions during his career. At the time of
termination, the employee was the Vice President Business
Development Canada, which was largely a sales position with no
supervisory responsibilities but required specialized skills and
knowledge of the CNG industry.
Taking into account the plaintiff's age, length of
employment, his degree of specialization and that for much of his
employment the plaintiff held senior level positions that carried
job duties with a high degree of responsibility and importance, the
Court held that the plaintiff should be awarded 16 months
The Court then turned to the issue of mitigation, specifically
whether or not the plaintiff had adequately mitigated his damages
by searching for reasonable alternative employment. The
plaintiff's evidence was that, after being terminated on May 2,
2014, he did not start his search for work in the gas or energy
industry until mid-June 2014, and by the end of July 2014 had
decided to pursue a career in financial management instead.
Thereafter, the plaintiff focused on completing the Canadian
Securities Course during August and September 2014, and was
ultimately offered a Sales Assistant position at CIBC Wood Gundy in
December 2014. The defendant filed responding evidence showing
available employment opportunities it argued were similar to the
plaintiff's prior position.
The Court reviewed broad-ranging decisions on the issue of
mitigation, including prior case law holding that an employee is
entitled to a reasonable adjustment period before seeking
reemployment, and that pursuing a new career can constitute proper
mitigation even where the new career takes time to establish and
has costs associated with retraining. Nonetheless, the Court held
that the plaintiff failed to adequately mitigate his damages in
this case. Specifically, the Court held as follows:
I am of the view that the plaintiff's criteria were too
narrow, that it would have been reasonable for him to make greater
efforts to find new employment, and that if he had done more he
would have likely achieved greater success in finding employment in
the industry that he had spent the major part of his working life.
In my further view, the plaintiff failed to pursue available
opportunities that fell within his skill and experience, conducted
too limited a job search, and placed a greater emphasis on his
personal preferences and career objectives than was reasonable in
all the circumstances.
Given this finding that the plaintiff had failed to adequately
mitigate, the Court held that the plaintiff's notice period of
16 months should be reduced by three months.
This case serves as an important reminder that while an
employer's burden of proving a failure to mitigate is very high
and that an employee's personal preferences are an important
factor in assessing post-termination mitigation efforts, there are
limits on what will be viewed as reasonable mitigation efforts by
the Courts. In particular, where an employer can show that there
were reasonable job opportunities available that the employee
failed to pursue, the length of the notice period may be
Employers seeking to rely on an employee's duty to mitigate
to reduce their exposure following an employee termination should
use this decision as a guide in terms of what types of evidence can
be relied on to demonstrate a failure to mitigate.
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.
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