In Link v. Venture Steel Inc.  O.J. No. 4849 an employee, Mr. William Link, sued his former employer, Venture Steel Inc. (“Venture”), for wrongful dismissal. Following his dismissal, Mr. Link took no steps to look for another position for a full year. He stated that he did not look for a job because he was afraid of violating a noncompetition clause and thereby jeopardizing a potential entitlement to millions of dollars.
The Court, while recognizing that Mr. Link had a genuine concern about violating his contract, believed that employment alternatives existed outside the steel industry which would not have violated his contract. Nevertheless, the Court ruled in favour of Mr. Link because the employer did not adequately demonstrate that he did not do enough to find alternate employment. The Court made it clear that the obligation of establishing that an employee did not dispose of their obligation to mitigate damages lies squarely with the employer.
In this case, Venture failed to lead any evidence of the availability of comparable employment within or outside of the steel industry.
By way of comparison, Hart v. EM Plastic & Electric Products Ltd. (c.o.b. EM Plastics)  B.C.J. No. 316 involved a 25-year employee who had worked with a plastics company. He was dismissed without notice or explanation from his job as a customer service manager. The employer offered severance payment equivalent to 8 ½ months’ base salary which included 8 weeks notice required by the provincial Employment Standards Act. The employee declined the offer and initiated a wrongful dismissal action against the employer. Following his termination he was offered alternate employment with other companies but turned them down to pursue a career in real estate.
Although the Court found the appropriate notice period to be 15 months, the quantum of damages was reduced because the employee was viewed not to have carried out his duty to mitigate damages. The Court consequently declined to award him any compensation beyond the statutory minimum that he had already received. It noted that:
- The employee had rejected two full time jobs directly comparable to his old job to pursue a new career in a completely unrelated field.
- The real estate business is risky and that the employee was likely to fail without adequate experience or contacts.
What does this mean for employers?
Be prepared to show that there were jobs that the terminated employee could have taken
The Link decision shows that it is not enough for an employer to show that the employee’s job search was lackluster. Rather, the employer must show that there was a job that the terminated employee could have taken. Be prepared to lead evidence from your industry as to specific jobs that were available and advertised for which the employee was qualified if you wish to go down the failure to mitigate route.
Keep employees accountable in a salary continuation scenario
As the Hart case shows, there are some circumstances that do trigger a failure to mitigate, such as a failure to accept a comparable job. When placing a terminated employee on salary continuation, consider placing ongoing obligations to report on job search efforts, and whether offers of reemployment have been received.