Since the Supreme Court of Canada ruled in Evans v. Teamsters,
much has been made about the issue of mitigation. That decision, a
positive one for employers, established a new standard in wrongful
dismissal cases for when employees would be deemed to have failed
to mitigate: essentially saying that except in extreme cases of a
breakdown in the employment relationship, if an employee refused an
alternative-employment offer from his or her employer then he or
she has failed to mitigate.
In another positive development for employers, a recent case out
of British Columbia may offer a new wrinkle: where an employee
takes him- or herself out of the job market to switch careers, he
or she may have failed to mitigate.
In Steinebach v. Clean Energy Compression
Corp., 2015 BCSC 460, the 49-year-old plaintiff had worked
his way up from service technician to Vice President Business
Development Canada during his 19.5 years with the company. When a
new President came on board in 2014 the company restructured, and
Steinebach was offered a new position that removed his title of
Vice-President and made him a Senior Regional Sales Manager, at the
same time adding a new layer of supervision above him –
Steinebach argued that this was, effectively, a demotion. In
addition, he argued that the new position reduced his potential
earnings and changed other significant terms with respect to
termination and non-competition.
For its part, the company took the position that the
plaintiff's duties remained the same and that the new
compensation package, while different, would provide the plaintiff
with a better incentive to "take a more proactive approach to
Justice Cohen of the Supreme Court of British Columbia sided
with the plaintiff and assessed reasonable notice at 16 months.
However, the most interesting part of the decision was the issue of
It is well-established that employees have a legal obligation to
reduce their damages upon termination of employment by attempting
to obtain comparable alternative employment. Generally, when
alleging that an employee has "failed to mitigate", an
employer will have a fairly significant burden to meet, as the onus
is on the employer to prove this failure to mitigate. In order to
do so it must be shown that:
The employee failed to make
reasonable efforts to find new employment; and
If reasonable efforts had been
exerted, other employment would have been successfully
Current case law says that employees are permitted a period of
adjustment before being required to begin their mitigation efforts
– in other words, they will not be penalized for a reasonable
delay in beginning their job searches. Steinebach began looking for
work approximately 1.5 months after his termination date, a time
period which Justice Cohen deemed reasonable in the
Where Steinebach failed in his duty to mitigate was in his lack
of diligence in pursuing opportunities within his field, before
summarily deciding he was not going to work and he would begin a
new career in the financial industry. In finding that the plaintiff
failed to mitigate, Justice Cohen relied on the fact that
Steinebach gave only cursory attention to trying to obtain a job in
his field before abandoning it for a new career, stating at
paragraph 82 of his decision:
...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.
It should be noted, though, that instead of dismissing the
plaintiff's claim for failure to mitigate, Justice Cohen merely
reduced the notice period by 3 months. While this may not be a
"home run" for employers in the same vein as Evans, it is
another tool in reducing exposure at, or before, trial in wrongful
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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