Dismissing an employee can be expensive. However, some employers add to the cost by being overly litigious. We recently argued, and won, a case at the Ontario Court of Appeal that could have been resolved at mediation. Learn more about the case and pitfalls to avoid.
Litigation
You terminate an employee, he/she challenges the termination asking for a longer notice period
but you have concerns they are not doing their part to find another job. Can you just raise
concerns to reduce your damages or does the law require more?
Employer bears the Onus
In cases of wrongful dismissal, it is the employer’s burden to prove that an employee has not
done enough to mitigate their damages by finding comparable work. This means an employer
must lead evidence to demonstrate an employee could have obtained a new job more quickly if
they had made reasonable efforts to do so. It is a very high standard to meet.
Comparable Job vs. Any Job
In Lake v. La Presse we represented the General Manager who had been employed with the
company for just over four (4) years managing the digital marketing team. She was dismissed
and claimed wrongful dismissal damages of 10 months inclusive of her salary, benefits, pension
and bonus. At a Motion for Summary Judgment, a Court awarded Ms. Lake eight (8) months of
notice but arbitrarily reduced it to six (6) months because she believed Ms. Lake should have
started applying for jobs earlier and should have considered positions as a sales representative if
she could not find work as a senior manager. A copy of the decision in Lake v. La Presse (2022)
Inc. is available here.
We appealed the decision and the Ontario Court of Appeal agreed with our submissions and
overturned the motion judge’s decision. The Court found that Ms. Lake was only obligated to
apply for “comparable” positions. She was not obligated to accept a demotion and apply for any
available job. Furthermore, the Court held that while a judge can make inferences those
inferences must be grounded in evidence. In other words, a judge cannot assume that:
i. comparable jobs were available to a dismissed employee,
ii. an employee would have been qualified for these jobs; and
iii. the employee would have been hired had they applied
Lessons for Employers
There are three key takeaways for employers from the Court of Appeal’s decision.
- Litigation is Uncertain. However, you can take risk off the table by identifying reasonable settlement options and engaging in mediation early in the process.
- The bar to challenge an employee’s mitigation efforts is very high. Given that legal hurdle, prepare settlement offers that reflect that reality and be prepared to roll up your sleeves and participate in meaningful discussion before the litigation process triggers an emotional response and causes the parties to dig into their legal positions.
- In a wrongful dismissal case, the employer should be prepared to lead evidence about a plaintiff employee’s failure to mitigate including copies of job postings that employee could have applied for or flaws in the criteria used to look for another job.