Mitigation: A Failure to Mitigate Risks Entitlement to Reasonable Notice

Man Reading Contract

Employees who are terminated, and whose contract entitles them to reasonable notice, are required to “mitigate damages” by seeking alternative work during their reasonable notice period. Typically, this means applying for, and accepting, comparable employment. In most cases employees do seek comparable work and discharge their duty, but what happens when an employee fails to mitigate?

In a recent decision, the Ontario Superior Court considered a situation where an employee sought a 22-month reasonable notice period following termination. The decision, Gannon v. Kinsdale Carriers, 2024 ONSC 1060, featured an employee, Ms. Gannon, who was terminated by the employer, Kinsdale Carriers Ltd., after 22 years of employment.

Background

The plaintiff, an employee, held a position at the employer, a trucking company, that consisted of accounts receivable and office duties. In around 2015, after the plaintiff had worked for 17 years, the plaintiff’s duties were augmented with dispatcher duties with increased compensation. After a few years of performing this role, the plaintiff was terminated on a without cause basis due to a closure of the business.

Surrounding termination, the employer’s owner provided the plaintiff with a contact at another trucking company for a prospective job. The plaintiff contacted the other company and discovered, according to the plaintiff’s evidence, that the job was a full-time dispatch position and would include on-call hours. After considering the position, the employee rejected the offer by text stating that she was not interested in a dispatching position. The plaintiff told the prospective employer she sought an account receivable or account payable position instead. The plaintiff stated, in her argument, that she was never presented with an actual job offer.

The defendant employer’s owner stated that she sought to secure employment for as many of the terminated employees as possible, including the plaintiff’. According to the employer, she insisted that the new prospective employer of the plaintiff match the plaintiff’s wage and hours.

The new prospective employer also appeared and gave evidence. They testified that they were surprised that the plaintiff rejected the job offer pointing to the plaintiff’s initial enthusiasm about the role.  The prospective employer stated that they made the role’s duties, hours, and pay clear to the plaintiff. The prospective employer further noted that the job was not entirely dispatch related and included administrative and other office duties.

Court’s Decision

The Court placed particular emphasis on the question of mitigation. The plaintiff argued that the plaintiff never wanted to do dispatch work and even while working at the defendant’s operation, she was never a full-time dispatcher. The Court disagreed entirety with this argument pointing to a change in the plaintiff’s title to dispatcher, the increase in compensation, and a change in hours of work.

The Court found that there had indeed been an offer of employment, which the plaintiff rejected when she sent the text message to the prospective employer. The Court examined the proposed employment and found that the new job was not exclusively a dispatch position given that it also came with other administrative duties. The Court therefore found that the employee’s rejection of the job offer was a failure to mitigate.

As a result, the court found that the employee was not entitled to any wrongful dismissal damages and found in favour of the defendant.

Takeaways

The employer in this case acted quickly to secure comparable employment for their terminated employees. Doing so was a significant upside to the employer because, as the result makes clear, the employee’s failure to accept the new position was entirely fatal to the employee’s case. Employers who are aware of comparable positions for departing employees would do well to consider informing their employees of such positions.

Employees should also be aware that they are required to seek comparable work, and failing to do so could result in significant consequences in any wrongful dismissal matter.

In general, if you are an employer engaged in a dispute regarding reasonable notice with an employee, you are entitled to know what efforts the employee took to find comparable work. At Bridge Legal & HR Solutions we can help you untangle and understand the web of obligations that applies to your employment relationships. To find out how we can help, contact us through our contact form or call us at 647-794-5442.

 

Latest Posts

All for one one for all

Employee Fiduciary Duties and Obligations

Higher level employees may be considered fiduciaries of an organization. This means they have a greater level of responsibility and obligation regarding confidentiality, non-solicitation and non-competition among other obligations. We break down a recent case regarding those duties.

Read More »