A recent decision of the Supreme Court of British Columbia has
provided one employer with a useful reminder on employment
contracts and sheds light on what it means to mitigate damages in
the digital age.
In James v. The Hollypark Organization Inc., 2016 BCSC
495, the defendant company, The Hollypark Organization Inc.
("Hollypark"), was run by a young entrepreneur named Mr.
Dhillon, who was 25 years old. Hollypark wanted to open a new hotel
in Vernon B.C. under the Marriott franchise. In order to start up
the hotel, Hollypark required a general manager with experience in
the hotel industry and, if possible, familiarity with the Marriott
brand. The plaintiff, Ms. James, was a good fit.
Hollypark hired Ms. James in 2012. However, an important fact
– and one with significant consequence in this case –
was that the two parties never entered into a formal written
For over a year Ms. James worked to help set up the new hotel,
which opened in July 2013. One month later, Ms. James was
terminated. She sued Hollypark, claiming the two parties had agreed
Ms. James would continue working at the hotel for the first year
after it opened. Hollypark denied such an agreement ever existed.
Even if one did exist, Hollypark claimed Ms. James failed to
mitigate her damages when she chose to fly to Mexico and spend the
entire winter there.
The Court was presented with a difficult task. Not only did Ms.
James claim there was an agreement for a one year term, she argued
it was completely oral. On this point, the Court held it was indeed
possible that an employment contract could be made orally and for a
fixed term, provided that both parties had a clear intention to
create such an agreement. In addition, the Court held that a
reasonable outsider would also have to conclude that a fixed term
agreement existed based on the evidence of the parties'
In this case, the key interpretive tool used to understand
contracts – a written agreement – did not exist.
Evidence had to come from other sources and because of this the
Court agreed "...there is greater flexibility in the nature of
the evidence that is admissible..." Indeed, the Court
considered a wide range of evidence – some fairly atypical
Mr. Dhillon's young age and lack
of training in the Marriott brand;
the fact that Ms. James committed to
a one year lease on a home in Vernon; and
even the fact that Ms. James ordered
a large number of business cards (500 in total) describing her as a
Taken together, the Court found that the evidence was consistent
with a one year contract which started the day the hotel opened.
Because Ms. James was terminated one month into the contract,
Hollypark was liable for her salary for the remaining 11
Finally, the Court found that even though she moved to Mexico
for the winter, Ms. James did not fail to mitigate her damages.
While there, she searched for jobs online, continued networking
with contacts in the industry, and became involved in a venture
with another individual back in Canada. Notably, "[i]n
today's world," the Court advised, "a person can
reach out to contacts and search for jobs from a variety of
locations." Hollypark could not use the bare fact that Ms.
James left the country as proof that she failed to mitigate.
Those familiar with employment law principles will find the
above comments on mitigation instructive. The courts recognize that
in this digital age, dismissed employees can mitigate their loss by
networking, applying for jobs – even interviewing –
remotely. The burden lies with an employer to prove a failure to
mitigate and employers can no longer rely on a trip overseas or, in
this case a winter in Mexico, as conclusive proof.
Those less familiar with employment law principles will learn
several lessons from Hollypark. Some employers are
surprised to hear that in cases of fixed term contracts, the
concept of reasonable notice does not apply. Instead, in these
cases, a dismissed employee will generally be entitled to the
unexpired portion of the contract; the longer the term of the
contract, the greater the potential liability. Second and more
importantly, whether fixed term or indefinite, part-time or
full-time, it is crucial that employers put their agreements in
writing. A well-drafted employment agreement will remove ambiguity
and reduce exposure. Those who base their employment relationships
on oral contracts may one day find themselves counting business
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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