The main concern for a recently terminated employee is often how much they are entitled to. As with most things, people turn to the internet, look at the top search results (or a few), and form a basic idea about their entitlements. Online tools such as Severance Pay Calculators can be useful as a starting point, but as they all prominently state in one way or another, “This is not legal advice. Speak to a lawyer.” Most terminated employees understand this and then contact an employment law firm for a (often free) consultation for legal advice.
The main reason for the requirement for an actual lawyer is that contrary to what many employees believe, there are no fixed rules for severance pay, also known as common law notice. The purpose of severance pay is to compensate employees for the harm suffered from their termination. This differs from the minimum legal notice under the Employment Standards Act, 2000, or the Canada Labour Code, which do have exact calculations.
The amount of common law notice is based on the length of time it would take that employee to find a new comparable job. In making this determination, Courts take into account an employee’s age, position, experience, length of time at that job, level of education, health, and even the state of the economy and compare this to previous court decisions. As summarized by the oft-repeated phrase, calculating notice is an art, not a science.
There are numerous other factors that influence an employee’s entitlement, such as the enforceability of the employment contract (CROSS LINK TO DUFAULT BLOG), if the employee was hired on a fixed-term contract, or if the employee was validly terminated for just cause.
Most of these factors solely deal with what occurred during employment and in the termination process. Mitigation is unique in that it deals with what occurs after the termination of employment.
What is Mitigation?
Mitigation, generally, means reducing the damage or severity of something. For example, running a burn under cool water mitigates the pain and damage in first aid.
In the legal context, it specifically refers to the duty of an person to make reasonable attempts to reduce the damage suffered. For example, if your home is on fire, you have a duty to call 911. However, you do not have a duty to try to put out the fire or remove all the valuables inside the house if that puts you in danger, as that would be unreasonable.
In wrongful dismissal cases, the damages a terminated employee suffers are the loss of employment, which is compensated for by reasonable notice. Due to this, a terminated employee has a duty to make reasonable efforts to “make on” and search for a comparable job. A terminated employee can also mitigate by enrolling in further education, starting a business, or becoming self-employed.
A terminated employee in a lawsuit is required to produce evidence of their efforts to show the Court they have attempted to mitigate. With modern job sites and almost all applications occurring electronically, this process is often as simple as keeping records of applications and saving emails.
The downside of this duty for an employee is that if they find a new job or mitigate through one of the other options, their claim for notice is limited to the amount of time they were unemployed. If you are offered a comparable position in 2 months, you can only claim for 2 months, no matter if you accept it and you were hypothetically entitled to 2 years’ worth of pay.
The recent decision in Gannon v. Kindale Carriers, 2024 ONSC 1060 shows the risks involved for a terminated employee in ignoring a job offer.
Facts:
Ms. Gannon was 57 years old when she was terminated from Kinsdale Carriers, a trucking company where she had been employed for more than 22 years. At the time of her termination, she held a role that was a mix of accounts receivable, dispatching, and office clerk.
Upon her termination, Kinsdale Carriers contacted other small trucking companies to see if any had comparable positions for Ms. Gannon. Zehr Transport confirmed it had a position and agreed with Kinsdale Carriers to match the terms of her previous employment. It then interviewed Ms. Gannon. What happened at the end of the interview was disputed. Ms. Gannon stated no offer was made, while Kinsdale Carriers argued that Zehr Transport had made a verbal offer for a similar position with the same hourly wage and hours of work as her former position at Kinsdale Carriers.
Ms. Gannon pursued legal action for wrongful dismissal, for a 22-months of reasonable notice, based on her age, length of service at Kinsdale Carriers, and position.
At trial, the Judge found that Zehr Transport had made a verbal offer for comparable employment, meaning Ms. Gannon was entitled to nothing.
Key Takeaways
One of the key points at trial was whether the job offer was made and if it was actually comparable. An employer is required to show that an employee failed to take reasonable steps to seek comparable employment and that if the employee had made reasonable efforts, they could have found new, comparable employment.
This case was unique in that the employer not only took proactive, personal steps but also effectively negotiated on the terminated employee’s behalf to find her a new job. In most cases, the employer does nothing to help the employee in their job search.
What does this mean for employees?
For employees going through a similar situation to Ms. Gannon, it is critical that you handle all your decisions carefully to make sure that you do not accidentally screw yourself over. As with most things in law, the devil is in the details.
As acknowledged by the Supreme Court of Canada, being terminated is often one of the most stressful events in someone’s life. It can be easy to miss a small detail, make a snap decision, or forget to do something that can severely harm your case.
The best way to protect yourself is to speak to an employment lawyer early and find one who will guide you through the process, answer your questions, and provide resources to help you understand your obligations and the litigation process.
The lawyers at De Bousquet Professional Corporation pride themselves on their client first focus and taking on the stress so you don’t have to. We want to be your chauffeurs through the litigation process. Call us today.