The British Columbia Court of Appeal in Steinebach v. Clean
Energy Compression Corp. provided an excellent refresher on
the principles surrounding an employee's duty to mitigate
damages after termination.1 The BC Court of Appeal
emphasized that the notice period and damages for wrongful
dismissal claims should be assessed in two separate steps. First,
the court should determine the notice period. Second, if the court
finds that an employee has failed to mitigate, the notice period
should remain the same and any damages resulting to the employee
within that period should be reduced or in some cases,
Steinebach v. Clean Energy Compression Corp. is also
instructive on what employers must demonstrate in order to prove
that an employee has failed to mitigate. The BC Court of Appeal
outlined the following key points:
"The duty to mitigate is not a
duty owed to an employer, rather it is a duty an employee owes to
conduct himself or herself as a reasonable person. In most cases,
this necessarily means that the employee must take reasonable steps
to find alternative employment upon
The employer bears the burden of
proving that an employee failed to mitigate his or her damages by
not acting reasonably.
An employee may fail to mitigate when
he or she focuses more on personal preferences and objectives, such
as pursuing a new career, than what is reasonable.
An employee may inadequately mitigate
when he or she opts for alternative employment at a lower income
when employment in a higher paying position could have been
Where an employer proves that an
employee failed to mitigate, or took inadequate steps to mitigate
his or her damages, the court may either:
find that the employee is not entitled
to any damages; or
reduce the employee's damages
based on the estimated period in which the employee failed to
mitigate. This can include determining the date by which the
employee should have secured alternative employment.
In this case, the respondent, Steve Steinebach, was terminated
from his employment as a salesperson with the appellant, Clean
Energy Compression Corp dba IMW Industries ("IMW
Industries"). Mr. Steinebach initially sought employment in
the same field but was unsuccessful. Approximately three months
after his termination, Mr. Steinebach began pursuing a new career
as a financial investments advisor. He was hired and began working
at an investment firm approximately eight months after his
The trial judge concluded that Mr. Steinebach was wrongfully
dismissed and was entitled to 16 months' notice. The trial
judge found that Mr. Steinebach failed to adequately mitigate his
damages. However, the trial judge simply reduced his notice period
by three months and did not explain how he calculated the three
month period or if there was a certain point by which Mr.
Steinebach should have secured alternative employment. The trial
judge also did not clarify if the timing of Mr. Steinebach's
change of career was the event that constituted a failure to
mitigate. IMW Industries appealed the decision, arguing that the
trial judge failed to properly assess Mr. Steinebach's damages
and notice period.
The BC Court of Appeal clarified that the notice period and
damages should be assessed separately for wrongful dismissal
claims. Further, an employee's failure to mitigate does not
reduce the notice period but rather, impacts the damages resulting
from the employer's failure to provide adequate notice. Thus,
where an employee fails to adequately mitigate, the notice period
will remain the same and any damages resulting to the employee
within that period will be reduced or in some cases, eliminated if
it is established that there was a complete failure to
The BC Court of Appeal concluded that the trial judge erred by
reducing Mr. Steinebach's notice period by three months in the
absence of any factual findings to support this conclusion.
Unfortunately for these litigants, the Court of Appeal ordered a
new trial on all the issues; a result which none of the parties
1. 2016 BCCA 112.
2. Coutts v. Brian Jessel Autosports Inc., 2005 BCCA
The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.
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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