January 7, 2023
Mitigation is one of those odd words used in law that most people are not instantly comfortable with. Odds are though that you are aware at least vaguely that when somebody is let go from their job, they have an obligation to look for new employment rather than simply sitting back and expecting their former employer to pay them an increased amount of damages in place of wages.
The duty to mitigate has been around for a long time, but the boundaries of that duty are still being defined by the courts.
THE ISSUE
What achieves reasonable efforts to mitigate? When does the employer get a reduction in damages?
THE CASE
That is what makes Lake v. La Presse a significant decision.
Ms. Lake was a senior sales executive managing the Toronto office of the Montreal-based newspaper La Presse. As general manager, she was the most senior employee in Toronto and managed a sales team of up to 13 staff. Her salary consisted of a base of $185,000 together with expectations of an annual bonus and other benefits.
La Presse decided to close its Toronto office and dismissed Ms. Lake without cause. Ms. Lake sought alternate employment but had not found work at the time of the appeal.
THE SUMMARY JUDGMENT MOTION
La Presse complained that:
- she had waited too long at the beginning of her unemployment to look for work; and
- she had only looked for senior level jobs. La Presse as employer argued that Ms. Lake had an obligation to take any reasonable employment which they viewed as being any sales position that would not have caused her public embarrassment. In other words even if she only made $1000 a week (rather than $3500 plus as she made at La Presse), it would be a benefit to La Presse by saving them some cost. They felt that they were entitled to that savings.
The Superior Court judge who heard the motion recognized that the onus was on the employer to establish that Ms. Lake failed to mitigate. There is a two stage analysis:
- First, whether the appellant took reasonable steps; and
- Second, if such steps had been taken that she would likely have obtained comparable employment.
The judge was satisfied that Ms. Lake failed at the first step – her efforts were not reasonable. She:
- Waited too long before beginning her job search;
- Waited too long before applying for any jobs;
- Applied to very few jobs; and
- “Aimed too high” in applying for vice-president roles and she should have been applying for less senior roles if she continued to remain unemployed.
If she had tried harder, the judge decided, she would have improved her chances of finding alternative employment. Because of this, the motion judge reduced Ms. Lake’s damages by two months.
THE APPEAL
The Court of Appeal disagreed with that result, and the way that the judge got there.
The finding that Ms. Lake waited too long to begin her job search was upheld, but the judge erred in saying that after a time looking for comparable employment, the dismissed employee must look for and accept a lower paying or lower status job. The Court of Appeal stated the law as follows:
The obligation of a terminated employee in mitigation is to seek “comparable employment”, which typically is employment that is comparable in status, hours and remuneration to the position held at the time of dismissal: Carter v. 1657593 Ontario Inc., 2015 ONCA 823, at para. 6. There was no obligation for the appellant, to seek out less remunerative work, including by working as a sales representative.
The Court of Appeal in Lake also ruled that the motions judge was wrong in saying that Ms. Lake “aimed too high”. Ms. Lake said she sought a senior role, using various key words that she thought represented comparable jobs to her experience. There was no evidence that contradicted what Ms. Lake said, yet the judge rejected Ms. Lake’s evidence and replaced it with their own belief. That is an appealable error.
The Court of Appeal goes further though to emphasize:
[26] The duty to “act reasonably” in seeking and accepting alternate employment is a “duty to take such steps as a reasonable person in the dismissed employee’s position would take in [her] own interests” and is “not an obligation owed by the dismissed employee to the former employer to act in the employer’s interests”: Forshaw v. Aluminex Extrusions Ltd. (1989), 39 B.C.L.R. (2d) 140 (C.A.), at pp. 143-44.
The motion judge’s speculation that Ms. Lake would have found comparable employment if she had taken what the judge considered reasonable steps was also an appealable error. There was no evidence to support that conclusion. Although an inference from proven facts is a permitted way to determine a failure to mitigate, in Lake there were no facts to support the finding.
THE RESULT
The motions judgment was set aside and replaced with a judgment that included the extra two months notice and no reduction for failure to mitigate.
TAKEAWAYS
- The Court of Appeal’s reasons do not say anything which is really all that new. In this case, they repeated established law in a clear manner.
- What this case also shows is that motions judges do not always get it right. That is why we have a Court of Appeal.
- Clarity in this case should make it easier to settle other cases, saving time and money for the parties.
- Findings of fact are normally not subject to appeal, but the findings must be based on facts, not speculation.
- The employer must be prepared to lead appropriate evidence, or at least demonstrate the failure to mitigate through cross examination.
- Good lawyering is important to both parties in any dismissal case.
WHAT WEILERS LLP CAN DO FOR YOU
The employment law team at Weilers LLP has the experience and knowledge to assist employers with all stages of discipline and discharge. If you are sued for wrongful dismissal, we are here to represent you with a strong defence. Two members of our team have taught related subjects at the Bora Laskin Faculty of Law – Brad Smith teaching the Labour & Employment Law course, and myself having researched and taught about mitigation for the Remedies course for many years.
If you have questions or concerns in this area, please contact us to discuss whether Weilers LLP may be the right lawyers for you.