The Consequence of Failing to Mitigate, Even During the COVID-19 Pandemic
In recent Ontario decisions, terminated employees have been awarded higher notice periods due to, in part, their clear efforts to mitigate their damages in light of the COVID-19 pandemic and the demonstrated difficulty it has created in the context of job searching. In doing so, Ontario courts have recognized the impact COVID-19 has had on the job market and, therefore, on dismissed employees attempting to fulfil their duty to mitigate.
However, does that heightened difficulty in finding jobs justify an employee in not making sufficient efforts to mitigate their damages? After all, if they are so unlikely to find a job, why bother searching?
According to one recent decision of the British Columbia Supreme Court, such a nonchalant approach to the duty to mitigate might undermine a dismissed employee’s case.
Factual Background: Mr. Moore’s Termination
The employee, Mr. Moore, was an employee at the defendant employer’s business for 26.5 years. For most of those years, Mr. Moore worked as a commercial sales representative. He was 53 years old when he was dismissed without cause following a significant decline in the employer’s business. The COVID-19 pandemic was largely to blame. In fact, Mr. Moore was only one of hundreds of employees who were laid off as a result of the pandemic.
Later, on July 15, 2020, Mr. Moore was handed his termination letter and provided with only eight weeks’ pay in lieu of notice – a shockingly low amount!
In response to his termination, Mr. Moore sought general, special, aggravated and punitive damages for wrongful dismissal. His employer argued that any damages owed to Mr. Moore should be reduced on account of his failure to mitigate his damages by not taking sufficient steps to find new employment.
What Period of Reasonable Notice Was Appropriate?
The trial judge began by determining, based on Mr. Moore’s age, length of service and character of employment, what amount of notice would have been appropriate. Mr. Moore was 53 years old and had worked with the defendant employer for 26.5 years – a very long time. Further, his actual job was highly specialized, thus suggesting that a longer notice period if appropriate. Given the above considerations, the trial judge determined that a period of 20 months would have been appropriate (a far cry from the 8 weeks originally provided!).
Did Mr. Moore Fail to Mitigate His Damages?
However, the defendant employer argued that Mr. Moore had failed to sufficiently mitigate his damages and, therefore, the damages they owe should be decreased as a result. The trial judge noted that the COVID-19 pandemic severely and negatively impacted the general economy and the relative availability of other employment. However, the trial judge also noted that Mr. Moore did not actively pursue any available job opportunity. Is this inactivity acceptable in light of the difficulties produced by the pandemic?
It is well known in law that a dismissed employee has a duty to mitigate their losses by seeking comparable employment. They must act reasonably and diligently (but not perfectly!) in pursuing new employment opportunities. In the era of COVID-19, these efforts might look somewhat different than they had before. However, with that being said, Mr. Moore nevertheless had an obligation to search for new and comparable employment. Unfortunately, the evidence revealed that Mr. Moore did not act reasonably and diligently in seeking new employment.
Mr. Moore testified that he created a resume (absent cover letters) and did computer searches for available jobs. This was not good enough. According to the trial judge: “A reasonable job search may include activities such as reaching out to contacts within the industry, writing cover letters setting out why you qualify for a position, following up with telephone calls, or email correspondence … A reasonable job search requires a willingness to explore how one’s experience and skills may be portable to other industries or areas.”
In the end, the trial judge found that Mr. Moore had failed in his duty to mitigate. This came with a heavy cost to Mr. Moore: the trial judge reduced his notice period by three months.
Takeaway: Pandemic Not an Excuse for Unreasonable Effort
For employees, this case is a warning that, even in the most difficult economic times, the duty to mitigate nevertheless requires you to make reasonable efforts to find alternative employment. You must remain active and diligent in your job search even where the likelihood of success is low. If you are unable to demonstrate that you made reasonable efforts to find new employment, you may see your entitlements reduced as a result.