In a wrongful dismissal action, employers will not be held liable for damages during the notice period if they can establish that an employee failed to reasonably mitigate her damages. To succeed, the employer must prove i) that the employee did not take any steps (or at least reasonable steps) to search for comparable employment and ii) had she done so, she could have obtained comparable employment.
In the wrongful dismissal action of Benjamin v Cascades Canada ULC, Mr. Benjamin was a line operator with 28 years’ service with Cascades, a tissue mill in Scarborough. In 2016, Cascades determined it would eliminate tissue production, but continue distribution, at its Scarborough site. Due to this restructuring, Cascades dismissed Mr. Benjamin on a without cause basis. Cascades offered Mr. Benjamin a severance package equivalent to 50 weeks, which was refused. As a result, Cascades paid Mr. Benjamin his statutory entitlements under the Employment Standards Act, 2000 (an amount equivalent to 8 months’ salary (including severance)). As part of its separation package, Cascades provided its dismissed former employees with job search coaching, outplacement counselling, and a weekly newsletter with job search tips, other comparable job opportunities at Cascades, as well as job postings with other employers. Rather than apply to these jobs, Mr. Benjamin decided to retrain as a welder.
Mr. Benjamin commenced a wrongful dismissal action, claiming two years’ pay in lieu of notice. On a motion for summary judgment to dismiss his claim, Cascades argued that Mr. Benjamin had failed to reasonably mitigate his damages by applying to the jobs forwarded to him, and that in the circumstances, retraining did not constitute reasonable mitigation. In dismissing Mr. Benjamin’s claim, the Court remarked that Cascades overcame its burden in showing that Mr. Benjamin could reasonably have avoided the loss he claimed. The Court found that either Mr. Benjamin did not reasonably review the jobs Cascades forwarded to him or did not review them at all. Rather, during this period, Mr. Benjamin had already decided to switch careers. In the Court’s view, had Mr. Benjamin applied to these positions, he would “likely” have gotten them. In neglecting to do so, Mr. Benjamin chose to deprive the employer of the opportunity to avoid damages arising from dismissal. As no damages were recoverable at law, the Court dismissed Mr. Benjamin’s claim in its entirety.
As an aside, the Court noted that in certain circumstances, retraining may constitute reasonable mitigation; however this will not be the case where the employer can prove there was available comparable employment during the time, which the employee would likely have secured had he so attempted.
This case underscores the importance of mitigation in wrongful dismissal actions. If the employer can prove that the employee failed to take proper and reasonable steps to mitigate damages, those damages will not be recoverable at law.