Employees suing former employers for wrongful dismissal damages are obligated to “mitigate” their damages, and a failure to do so may lessen the damages awarded by a Court. In Part 1 of this series, we provided a general overview of the employee’s duty to mitigate. In Part 2, we are delving into specific mitigation issues: whether an employee is required to seek out lower paying positions after an unsuccessful period of searching for a more comparable role; whether job titles of the positions applied for matter; and how employers meet the onus of showing an employee has not met their duty to mitigate. These questions were answered by the Ontario Court of Appeal in Lake v. La Presse, 2022 ONCA 742. Note that the decision discussed here overturned Lake v. La Presse (2018) Inc., 2021 ONSC 3506, which we covered in a previous blog post.
In Lake v. La Presse, Ms. Lake had been a General Manager for 5.5 years with La Presse, an online French language newspaper, and was the most senior employee in their Toronto division. She had a base salary of $185,000 per year with a car allowance, annual bonus, pension, and other benefits, and she was 52 years old at the time of dismissal. La Presse terminated her without cause.
Ms. Lake signed up for email notifications from Indeed, participated in career transitioning services, and met with a career coach. Her job search began approximately 2 months after her last day of work and she applied for 7 jobs in the 9 months following her termination.
Part 1 of Mitigation Test: “Reasonable” Steps to Mitigate
In order to demonstrate a former employee has not met their duty to mitigate, an employer defendant must first demonstrate that the former employee failed to take reasonable steps to mitigate their damages.
No Duty to Seek Out Lower-Paying Roles
Overturning the Superior Court Judge’s finding, the Court of Appeal found that there is no obligation to seek out jobs with lower pay if the initial search for roles with comparable pay or status is unsuccessful. Employees are only required to seek out comparable roles.
Comparable Job Duties May Justify Seeking Roles with More Senior Job Titles
The Superior Court Judge also found the mitigation efforts to be unreasonable because 6 of the 7 positions applied for were “Vice President” roles. The Court of Appeal found that this placed too much emphasis on the title of the positions the plaintiff applied to, rather than the job description. If the substance of the duties is similar to the plaintiff’s position at the time of dismissal, the title is not determinative.
Part 2 of Mitigation Test: Reasonable Steps Would Have Lead to Expectation of Securing a Comparable Position
Once an employer establishes the employee failed to take reasonable steps to mitigate their damages, they must then demonstrate that, had the former employee taken such reasonable steps, they would have been expected to secure a comparable position reasonably adapted to their abilities.
The Court of Appeal accepted the finding that Ms. Lake’s delay of 2 months before beginning her job search was unreasonable in the circumstances. However, La Presse failed to demonstrate that, if Ms. Lake had taken reasonable steps to mitigate sooner, she would have found alternate employment.
If Ms. Lake had delayed their job search and subsequently secured a job soon after she started looking, this may have shown that earlier job search efforts would have led to earlier mitigation. However, in this case, Ms. Lake still had not secured comparable employment by the trial date, and there was no other evidence to suggest she would have likely secured comparable employment sooner. The fact of failing to look earlier, alone, was not enough.
Key Takeaways for Employers
The Court of Appeal found the employer had not met its burden to demonstrate Ms. Lake failed to mitigate. In doing so, the Court clarified both the employee’s and employer’s duties:
- The employer’s onus to demonstrate the former employee has not met that duty is not easy to meet.
- As a former employee’s job search continues unsuccessfully, former employees are not required to lower their standards to seek out a less comparable position.
- Job titles of positions applied for do not, alone, determine whether the job search was reasonable.
- Employers often cannot rely on a former employee’s failure to make efforts to mitigate alone, they must also demonstrate its impact on securing alternate employment.
Mitigation assessments are fact-specific and nuanced. If you have questions about a former employee’s duty to mitigate, get in touch!