Court Takes Notice of COVID-19 Pandemic in Assessing Constructively Dismissed Employee’s Mitigation Efforts

Written on behalf of Peter McSherry
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We had previously written about two Ontario cases in which the COVID-19 pandemic was considered in determining the appropriate notice period for dismissed employees.

In a more recent Alberta case, the court considered the impact of the pandemic primarily in assessing whether the terminated employee had properly mitigated her damages. A duty to mitigate requires the employee, whether terminated with or without notice, to take all reasonable steps to mitigate his or her losses, which will typically be accomplished by finding or attempting to find alternate equivalent employment. 

Employee Dismissed During COVID-19 Pandemic

The employee began working for the employer, a publicly-traded energy company that explores and develops petroleum and natural resources, as a senior integrity engineer in 2013. 

On March 27, 2020, the employer announced that, effective April 1, 2020, it would institute a company-wide “Cost Reduction Program”, which included:

  • a salary reduction of 10% for all employees;
  • a salary/fee reduction of 20% for all Directors and the CEO;
  • a suspension of 6% RRSP Contribution Program; and
  • the delay/cancellation of the 2019 Bonus Program.  

As a result, on April 1, 2020, the employee’s base salary was reduced from $154,800 to $139,320, her RRSP contributions were suspended and her bonus status was unknown. In addition, her access to seminars and training was curtailed. The employee took no steps to accept or reject theses changes.

Then, on April 22, 2020, in a further cost-cutting measure to achieve a 15% reduction in the employer’s workforce, the employee, along with a number of other employees, was terminated without cause.

The employee applied to court, seeking damages for wrongful dismissal. 

Court Takes Notice of COVID-19 Pandemic in Assessing Duty to Mitigate

At the outset, the court considered whether the employee had in fact been constructively dismissed. Noting that she had been terminated without cause 25 days after the implementation of the Cost Reduction Program and she had not had time to consider whether she was being constructively dismissed, the court found that the implementation of the Cost Reduction Program resulted in the constructive dismissal of the employee because it constituted a substantial change in the essential terms of her employment contract which she had not assented to.

The court then considered the following factors in determining the length of notice the employee was entitled to: the character of the employment, the length of service, the employee’s age and the availability of similar employment, having regard to the experience, training, and qualification of the employee.

Ultimately, the court determined that the employee was entitled to nine months’ reasonable notice.

Finally, the court considered whether the employee’s mitigation efforts had been adequate in the circumstances. The court observed:

“[The employee] asserts that she has made reasonable efforts to mitigate her damages and that her lack of finding new employment should be seen in light of the economic downtown and its particular effect on her field of expertise. The Covid-19 pandemic has been noted above. I take judicial notice that in Calgary, around March 15, 2020, most non-essential businesses closed their workplaces and migrated to remote work. Less than two weeks later, the Cost Reduction Program was announced. About 5½ weeks after the initial closure of non-essential workplaces, [the employee] was terminated. Not only had there been an economic downturn in oil and gas before the pandemic took hold, looking for a new job in the midst of pandemic when so many businesses were assessing what resources they required, and were changing all of their communication practices, must have had a negative effect on every job seeker’s ability to seek a new opportunity.”

While the employee had been unable to find alternate equivalent employment following her termination, the court found that she had made reasonable efforts, which included updating her profiles on professional social media sites, networking, taking a one-day session targeted to help former oil and gas sector employees find new employment, and applying to over 10 jobs. 

The court concluded by stating:

“The onus of proving a failure to mitigate rests on the employer and is not an easy burden to discharge…. I find that [the employee]’s attempts to mitigate have been adequate, especially in light of the Covid-19 pandemic conditions.”

In the result, the court therefore found in favour of the employee and awarded her nine months’ reasonable notice.

Get Help

If your employment has been terminated without reasonable notice or severance from your employer, you might have a claim for wrongful dismissal. Even if your employer claims that the notice or severance is reasonable, it pays to check with a highly qualified employment lawyer to ensure that all legal requirements were, in fact, met by your employer. The employment laws are complicated and intertwined. The basis for a claim might exist even if your employer claims to have followed the law. 

At Peter A. McSherry Law Office, I provide each of my clients with a full assessment of his or her case. Disputes in wrongful dismissal claims are usually based on severance pay, benefits and/or the timeliness of the notice. However, if an employer claims or cites misconduct as the cause for dismissal, reasonable notice is not needed. We can discuss the facts of your case. I can help you discover and weigh your options in a straightforward manner with respect for your needs and objectives. I can protect your rights. Call me at 519-821-5465 or contact me by e-mail to schedule a consultation.