A typical wrongful dismissal case (where cause is not an issue)
generally involves two legal issues. First, how much
reasonable notice of termination (or pay in lieu) should the
employee have received based on the employee's age, length of
service, position, compensation and the availability of comparable
employment. Second, did the employee mitigate his/her damages
by finding alternative employment or failing to make reasonable
efforts to do so during the notice period? Notably, a judge
can decrease the notice period based on the employee's
unreasonable mitigation efforts.
Often times by the time the trial rolls around, the notice
period has finished. The employee's damages (i.e.
compensation over the notice period less mitigation earnings) have
"crystallized". The employer can test the
employee's mitigation efforts in Court. However, what
happens when a judge determines the notice period at a time when
the majority of the notice period has yet to run its course?
With summary judgement procedures becoming increasingly (and
properly) used by Plaintiff's counsel in achieving a quick
hearing date, this issue has increasingly come before the
The most recent case on this issue involved an employee with
40 years of service who was awarded 27 month's pay in lieu of
reasonable notice at a summary judgement hearing. That
hearing occurred 8 months following the termination date. The
employer argued the result meant that the employee would be
guaranteed 27 months' pay, thus absolving him from his duty to
mitigate during the 27 months. The employer would be in a
position where it had to pay the maximum liability when it was
possible that the liability might be less based on the
employee's mitigation efforts. The employee claimed that
he had presented enough evidence to the Court such that it could
find that he had made reasonable efforts to mitigate his damages
during the 8 months leading up to the summary judgement hearing,
and would not be able to mitigate going forward for the remaining
19 months of the notice period.
The judge found that there are three approaches used by the
Courts in dealing with this issue:
The Trust Approach: The employee must
account to the employer for any mitigation earnings and a procedure
is designed for potential for a return to Court in the event of
The Partial Summary Judgment Approach:
The parties return at the end of the notice period to determine the
adequacy and success of the employee's mitigation efforts.
The Contingency Approach: The
employee's damages are reduced by a contingency for
The judge held that while the evidence showed the employee's
chances of re-employment were low, it did not establish that
re-employment during the 27 month notice period was not possible.
The Judge found it appropriate to adopt the "Trust
Approach". The result was that the employer would have
the obligation to pay the employee over the 27 month notice period
on a monthly basis subject to the employee's continuing
obligation to mitigate his damages. If the employee disclosed
earnings (and that is the "trust" aspect here) the
employer would deduct the earnings from the monthly payments.
The case is important as it demonstrates that employers should
think carefully about how to handle wrongful dismissal cases where
the only issues are notice period and mitigation. Not only
can employees obtain a speedy hearing date via the summary
judgement rules, the fact that the notice period has not run its
course will not be a barrier for courts to award the maximum
damages over the notice period (subject to "trusting" the
employee of course to account for his/her earnings).
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.
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