We previously explored Ontario case law involving situations where employers failed to meet the high threshold for successfully arguing that a former employee did not fulfill their duty to mitigate damages (see our blogs on two such decisions, Jimmy How Tein Fat v PRGX Canada Corp and Lake v La Presse). However, the Ontario Superior Court of Justice (the “Court”) recently ruled in favour of the employer in Gannon v Kinsdale Carriers [Gannon], holding that an employee was not entitled to reasonable notice damages and had failed to mitigate her damages.

Facts

The employee initially worked at the employer’s trucking company in a primarily administrative role. In or around June 2015, the employee’s role expanded to include dispatch duties, and this change was accompanied by an increase in her hours of work and salary.

On December 16, 2020, the employer sent a Notice of Closure letter to all employees stating that as of December 31, 2020, the company would permanently close. The employee received her minimum termination entitlements under the Canada Labour Code. Additionally, the company’s President proactively assisted employees with finding comparable work, including by providing the employee with contact information for two transportation companies in efforts to find her a role with similar pay, hours, and duties.

The employee claimed that she did not receive any comparable offers of employment from the companies the President put her in contact with.  In particular, the employee claimed that while she had a meeting with one such company (the “Alternative Company”), the meeting had been “exploratory in nature”, the role being discussed was a full-time dispatcher role (distinct from her primarily administrative role with the employer), and that no offer was actually extended to her. In support of her claim, the employee produced a text message she sent to the Director of Operations at the Alternative Company, in which she stated that she was not interested in a full-time dispatch position but rather was interested in an accounts receivable role. The employee further wrote that she wanted to “explore what is out there and maybe take some on line courses”.

At trial, the Court received evidence from the employer and the Alternative Company which contradicted the employee’s claims. Their evidence indicated that the employee had attended a job interview with the Alternative Company which resulted in a verbal offer of employment. Further, it was clearly communicated to the employee that her role would include both dispatch and administrative duties, and that her salary and hours of work would remain the same.

Following her dismissal, the employee filed a wrongful dismissal claim against the employer.

Decision

The Court held that the employee was not entitled to reasonable notice damages, and that the employee had failed to mitigate her damages when she rejected an offer of comparable employment approximately two weeks after the termination of her employment.

In its analysis, the Court noted the longstanding principle that the burden of proof lies with the employer to demonstrate that an employee did not take reasonable steps to mitigate by seeking comparable employment. If an employer successfully demonstrates this, the court may award reduced damages to the employee.

The Court considered the evidence and credibility of the parties and witnesses. The Court commented that it found the employee, whose evidence was contradicted by other documentary and witness evidence, to be “entirely incredible”. The Court accepted the evidence of the employer and the Alternative Company, and ultimately found that the employee had rejected a verbal offer of comparable employment, including to pursue an online course in bookkeeping. The Court noted that if an employee wished to pursue further education following the termination of their employment, it “should not fall to the [employer] to fund [these] pursuits”.

Takeaways For Employers

The Gannon decision provides insights on measures employers can take when dismissing an employee to increase the chance of successfully arguing, in a wrongful dismissal claim, that the employee failed to mitigate their damages. In this case, the employer was proactive by promptly referring employees to other employers in the same industry and specifying that any job offer should be comparable to the employee’s previous role.

Where feasible, employers should assist dismissed employees in securing comparable opportunities. Employers should consider factors such as similar hours, pay, and responsibilities when determining whether a role is comparable to the employee’s previous role.

If an employee unreasonably delays their search for a new job, or chooses to reject an offer of comparable employment, an employer may rely on these circumstances to argue for reduced damages that might otherwise be owed to the employee.

 

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.