Notice periods can be reduced if an employee doesn't try hard enough to mitigate damages
By Stuart Rudner
As I discussed last week , the common law concept of notice of dismissal is intended to estimate how long it might take to find new employment. The seminal case on this point, Bardal v. Globe and Mail, states the following:
"There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.”
This quote refers to four distinct factors. Since then, our courts have been quite clear that these are not exhaustive and that there is no limit upon the factors that can be taken into consideration. Three of the core factors are most often considered because they are relatively easily assessed: length of service; age; and position/character of employment.
What about the availability of similar employment? Some courts will mention it, but it is often either ignored or glossed over. However, it is open to the parties to adduce evidence on this point.
The employee could produce evidence of the lack of similar jobs in order to justify a lengthier notice period. This could be particularly relevant where the industry is consolidating or where their employment is very specialized. Conversely, it is open to the employer to provide evidence of similar positions that were available since the time of dismissal in order to demonstrate that it should not have taken the employee long to find new employment. This can actually be relevant in two ways: First, with respect to the availability of similar employment factor and, second, with respect to the employee's mitigation efforts.
Mitigation can be a critical factor, as discussed briefly in my last post. If an employee finds new work, then her potential claim will be reduced. However, if she doesn't make reasonable efforts to do so, then her entitlement can be reduced as well. While the threshold for demonstrating reasonable efforts to mitigate is generally perceived as being low, there are certainly cases where courts will "penalize" an employee for not looking hard enough.
In the recent Ontario case of Legge v. TEKSmed Services Inc., the court wrote the following in the context of assessing the availability of similar employment:
[30] The evidence on this point is not clear. The Plaintiff has not been successful in obtaining employment in the field in which he was employed, being that of management of Workers’ Compensation Board claims.
[31] This is a rather narrow field and the Plaintiff, in the absence of finding another appropriate position, has now chosen to improve his education in order to better qualify for other employment.
However, the court went on to consider the plaintiff's mitigation efforts:
[33] The Defendant alleges that the notice period should be reduced because the Plaintiff has failed to reasonably mitigate his losses.
[34] It is further submitted by the Defendant that since the Plaintiff made his first job application only on July 30, 2012, he had done nothing for an unreasonable four and a half months after being terminated. He has made only ten applications since then and this is too few to be reasonable, says the Defendant.
[35] Further, the Defendant argues that the Plaintiff has unnecessarily limited his job search, given that his managerial skills are not unique or specialized.
[36] He also failed to keep the Defendant advised of current job searches.
[37] In at least one case, he failed to respond to a contact from a prospective employer for ten days. He did not contact any of his former clients. Overall, his efforts have been sporadic and half-hearted.
[38] Accordingly, it is submitted that the ten month notice period the Defendant advocates should be reduced to six months.
[39] One of the cases relied on for this principle is Walter Bustos v. Celestica International Inc., 2005 CanLII 24598 (ON SC), 2005 CanLII 24598 (ON SC) at paras. 37 and 38. The employee claiming unjust dismissal did not commence his job search until 12 weeks after termination. The Court held that the time lapse was unreasonable and reduced the notice to which he would be otherwise entitled by eight weeks.
[40] The Plaintiff responds to these allegations that he applied on-line for positions and would go to various websites where jobs would be posted. There is often no record of such activity.
[41] With respect to not advising the Defendant’s counsel as to his ongoing job searches, his evidence was that he did not know that this was an obligation. There was no evidence of such an undertaking having been requested.
[42] He also explained that he was offered a certain settlement by the company, but that it came with a non-disclosure, non-solicitation and non-competition agreement. According to terms of these, he was not to disclose confidential information, approach any of the Defendant’s customers, or engage in any competitive activity for a period of 24 months.
[43] He was therefore fearful, he said, that if he approached former clients in any way or breached what he considered a fiduciary duty to his former employer, there might be serious repercussions. His fear was based on how the company had acted in a case similar to his.
[44] His reasoning may not have been entirely correct, but his knowledge of the company set the context for his conclusion, and I accept this explanation for some of the non-activity of which the Defendant complains.
[45] However, I cannot find that the Plaintiff’s efforts were as whole-heartedly energetic as one might expect. Accordingly, I reduce the notice period from 13 months to 12 months on the basis that while he may have had reason to tread softly, he should have begun his job search sooner.
This does not happen often, but employees should be aware of the possibility. They should meticulously document all efforts to find new work, from formal applications and interviews to informal online searches and discussions. At the same time, employers should keep themselves aware of opportunities that former employees may be qualified for, and document those in order to be in a position to challenge their mitigation efforts.
Stuart Rudner is an HR lawyer and a founding partner of Rudner MacDonald LLP, a Toronto-based firm specializing in Canadian employment law. He provides clients with strategic advice regarding all aspects of the employment relationship, and represents them before courts, mediators and tribunals. He is author of You’re Fired: Just Cause for Dismissal in Canada, published by Carswell. He can be reached at [email protected]. You can also follow him on Twitter @CanadianHRLaw and join his Canadian HR Law Group on LinkedIn.
