In most wrongful dismissal cases, the court is required to address the trifecta of issues:
- What is the applicable period of reasonable notice of termination to which the terminated employee is entitled following an application of the usual factors set out in the seminal case of Bardal v. Globe and Mail and those that have followed it?
- What damages should be awarded in all the circumstances?
- Did the employee fail to mitigate and, if so, what impact does this have on his or her recovery?
The issue of mitigation was recently considered by the British Columbia Supreme Court in Dodge v. Signature Automotive Group Ltd., 2014 BCSC 1452 (CanLII).
The plaintiff had 20 years of service with the employer and worked as its senior financial services manager. His employment was terminated on July 29, 2013 at which time he was 59 years of age. He was offered a separation package which was not accepted. He sued. At no time did he request a letter of reference to assist him with his job search. Similarly, the defendant never offered to provide him with a letter of reference.
The Court considered the Bardal of age, length of service, position and “ the availability of similar employment, having regard to the experience, training and qualifications of the employee. The Court honed in on “age” and, as many do, made assumptions without evidence for the following statement:
Nonetheless, even for the particular work the Plaintiff was doing, I expect that the marketplace prefers 50-year-olds over 60-year-olds, and probably 45-year-olds over both. Thus, the Plaintiff's age is a factor in his favour under the Bardal analysis.
In all of the circumstances, the Court found that the plaintiff was entitled to a reasonable notice period of 17 months and was entitled to damages for the losses suffered through that period.
The Court then went on to consider the issue of mitigation.
The Mitigation Obligation and Analysis
The leading Canadian case on the duty to mitigate is Michaels v. Red Deer College,  2 S.C.R. 324 where the Chief Justice commented as follows:
In the ordinary course of litigation respecting wrongful dismissal, a plaintiff, in offering proof of damages, would lead evidence respecting the loss he claims to have suffered by reason of the dismissal. He may have obtained other employment at a lesser or greater remuneration than before and this fact would have a bearing on his damages. He may not have obtained other employment, and the question whether he has stood idly or unreasonably by, or has tried without success to obtain other employment would be part of the case on damages. If it is the defendant's position that the plaintiff could reasonably have avoided some part of the loss claimed, it is for the defendant to carry the burden of that issue, subject to the defendant being content to allow the matter to be disposed of on the trial judge's assessment of the plaintiff's evidence on avoidable consequences. From this passage, the following is clear. First, the plaintiff must demonstrate that he suffered damages in the form of a loss of income. Second, if the plaintiff has established damages, the defendant has the onus of demonstrating a failure to mitigate. Third, if the defendant asserts a mitigation defence, the plaintiff has no legal onus to demonstrate mitigation but, in most circumstances, self-interest would dictate that a plaintiff adduce such evidence. [Emphasis added]
While this case was not cited by the Court in Dodge, it did reference a number of other cases.
In discussing the extent of the duty, the Court referenced Bates v. John Bishop Jewellers Limited, 2009 BCSC 158 (CanLII) in which the Court quoted and approved of the following passage from Smith v. Aker Kvaerner Canada Inc. and Kvaerner Power Inc., 2005 BCSC 117 (CanLII):
In seeking and accepting alternative employment, the plaintiff has a duty to act reasonably and to take such steps as a reasonable person in the plaintiff’s position would take in his own interest to maintain his income and his position in his industry, trade or profession. The duty involves a constant and assiduous application for alternative employment, an exploration of what is available through all means: Forshaw v. Aluminex Extrusions Ltd. 1989 CanLII 234 (BC CA), (1989) 39 B.C.L.R. (2d) 140 (B.C.C.A.) and Leawood v. Thunderbird Home Centres (unreported) April 3, 1995 decision of Koenigsberg J. (Supreme Court of British Columbia action no. C941213 – Vancouver Registry). [Emphasis added]
The employer must demonstrate that the plaintiff has failed to take reasonable steps to avoid the loss.
In discussing the evidence, the Court repeated that the plaintiff did not ask for, nor was he offered, a reference letter to assist with his job search. Throughout all of 2013, he did not prepare a resume to show to prospective employers and then, in January 2014 only prepared a one page resume that, for some reason, “was not placed in evidence”. The Court made a short, but bitting comment as relates to the issue “its brevity may have been commendable, but its timing was late.” Ouch (if you’re the plaintiff).
The plaintiff was examined for discovery in June 2014 (over 12 months after his termination). At that time, he had applied for 3 or 4 positions. The Court commented:
In total, he has applied for seven positions and of those, two were sought in July 2014, i.e. the month when this summary trial was held, and one or two in June of 2014. Mr. Dodge checks the Vancouver Sun for jobs, more or less daily, and subscribes to an electronic job-posting service, called LinkedIn, which he also checks regularly. Mr. Dodge has attended one job interview. Three or four times, he has spoken with a couple of people he knows who are well-informed in the retail car industry, but that has led nowhere.
The defendant presented evidence that there was another car dealership, in the same area, that had openings for four positions since July 2013. There were two other openings in other car dealerships. The defendant presented further evidence of other car dealerships in the general geographic area where the plaintiff had been employed. The plaintiff did not contact any of those dealerships (or possibly only one or two). He did not apply to any of the dealerships in the very auto mall where he had worked because, he felt that this would have been “futile given that he was let go at a dealership in the same Mall.”
In concluding that the plaintiff failed to mitigate in the circumstances, the Court observed:
In my view, the Plaintiff did not do enough to find new work. It is never easy to pound the pavement and knock on doors after one has been let go from a job, particularly after many years. But it is, nonetheless, the duty of a plaintiff employee to act reasonably so as to secure new work if it is available. In my view, it was impossible for the Plaintiff to know what the job market held for him when he did not do enough to learn what the prospects really were. Literally knocking on doors, leaving resumés, asking to have lunch and taking other such steps are necessary, certainly in retail car sales, where word of mouth and personal links appear to count for a great deal.
The Court commented that the plaintiff had not consulted a job search company to assist with his job search. While not necessary, it was, in the court’s view, “indicative of his somewhat passive attitude about his important task of seeking new employment.”
Having regard to the plaintiff’s failure to mitigate, the Court reduced the damages payable to the plaintiff from 17 months to 14 months.
Lessons for Employers
The Supreme Court of Canada in Evans v. Teamsters, Local 31,  1 S.C.R. 661 reaffirmed the conclusion in Red Deer College that “the employer bears the onus of demonstrating both that that an employee has failed to make reasonable efforts to find work and that work could have been found”.
The Ontario Court in Somir v. Canac Kitchens, A Division of Kohler Canada Co.,  O.J. No. 5052 held that:
The onus rests on the defendant to show either that the plaintiff “found, or by the exercise of proper industry in the search, could have procured other employment of an approximately similar kind reasonably adapted to his abilities”… the defendant must establish that the plaintiff’s conduct in seeking to find alternative employment was unreasonable in all aspects.
Mitigation need not be perfect, but does nee to be reasonable. The Dodge case, while possibly in the minority, supports that the onus is not insurmountable. Employers should start gathering evidence with respect to comparable job vacancies worthy of investigation by a plaintiff once it becomes apparent that a settlement with the employee is unlikely. The employee is required to act reasonably and make “a constant and assiduous application for alternative employment, an exploration of what is available through all means."
Dodge is the most recent word on the extent of the duty to mitigate and the onus.