It is well-established that employees have a legal obligation to
minimize damages post-termination by attempting to find comparable
alternative employment. If an employee brings a wrongful dismissal
action, employers will often include an allegation that the
employee failed to mitigate their damages as part of their defence.
The onus for proving a failure to mitigate rests on the employer.
It must be shown that:
the employee failed to make
reasonable efforts to find new employment, and
that if reasonable efforts had been
exerted, other employment would have been successfully
The burden is exceptionally high for an employer to prove an
employee's failure to mitigate. Rarely do Courts find that a
wrongfully terminated employee failed in his or her duty to
mitigate; however, in Steinebach v Clean Energy Compression
Corp, 2015 BCSC 460, the employer was successful in proving
the employee had failed to mitigate his damages.
In that case, the employee was terminated without cause after
19.5 years of employment at Clean Energy Compression Corp, a
supplier of equipment in the compressed natural gas (CNG) industry.
Prior to termination, the employee had been promoted to the
position of, "Vice President Business Development
Canada"; a high level sales position requiring a specialized
set of skills, expertise and experience pertaining to the CNG
The Court determined that the employee had been terminated
without just cause and awarded a reasonable notice period of 16
The Court then addressed the allegation of failure to mitigate.
The employee had been terminated on May 2, 2014. He started his
search for new employment in mid-June 2014. The Court considered a
variety of case law concerning the appropriate adjustment period an
employee is entitled to before commencing a new job search
following dismissal. The time taken by the employee before starting
his job search was found to be acceptable.
The Court then examined the details of the employee's job
search efforts. The employee searched for an opportunity similar to
the position he had held prior to termination; that being one of a
senior title in business development and sales management in the
CNG industry. He was not successful in finding a similar position
as he believed each opportunity encountered to be a poor match for
his qualifications, experience and desired job location.
By the end of July 2014, the employee had made the decision to
undergo a career change. He was told that a job would be available
for him with CIBC Wood Gundy upon completion of the Canadian
Securities Course. The employee completed the course on October 2,
2014 and was offered a Sales Assistant position on December 15,
2014. He started work at CIBC Wood Gundy on January 2, 2015, 8
months after his termination. The employee argued that these
efforts discharged his duty to mitigate.
The employer argued that the employee had not made reasonable
attempts at securing similar employment, and put forth evidence of
many available job opportunities that met the employee's
qualifications and were in the same community.
The Court held that the employee had not
adequately discharged his duty to mitigate. In particular, it found
the employee's search for new employment had been too narrow.
This was explained at para 82:
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 likely have 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 of the circumstances.
The Court reduced the 16 month notice period by 3 months to
account for the employee's failure to mitigate.
What This Means for Employers
When an employee brings a wrongful dismissal action, it is
prudent to include an allegation that the employee failed to
mitigate his/her damages in the employer's defence, even if
this argument is rarely successful.
The likelihood of successfully establishing a failure to
mitigate increases where there is evidence that an employee
conducted a very narrow search for new employment and/or the
employee discontinued his/her search for employment in the industry
in which they were formerly employed.
If alleging a failure to mitigate, the employer will be required
to provide evidence of job vacancies that were available, and which
match the employee's skills and qualifications.
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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