Written on behalf of Peter McSherry

It is well-understood in Canadian law that a person who is wrongfully terminated from their employment is entitled to receive damages for the wrong that has been done to them. Such compensation often includes an amount for “reasonable notice damages”, which are calculated on the basis of, amongst other things, the length of time for which that person worked for the specific employer, the age of the employee at the time of termination, and the specialization and status of the role played by the employee prior to their termination.

However, the award of reasonable notice damages itself and the amount awarded may be affected by the employee’s behaviour post-termination; specifically, the terminated employee’s actions with respect to mitigation. Any person who has been wrongfully terminated from their employment is expected to make efforts to mitigate their circumstance, by actively seeking out alternative employment to replace that from which they had been dismissed. Failure to mitigate may have serious consequences for a wrongfully terminated employee, as demonstrated by the recent Ontario Superior Court of Justice decision in Gannon v Kinsdale Carriers.

Employee Terminated After More than Two Decades with Company

The case of Gannon v Kinsdale Carriers involved the plaintiff employee (SG”), who had been employed with the defendant trucking company (“Kinsdale”), for more than 22 years, from July 1998 until her termination in December of 2020. SG was 57 years old at the time of her termination and, although she had been hired as an accounts receivable clerk, at the time of her termination, SG performed the duties of both an accounts receivable clerk and a dispatcher.

In the 12 months that preceded her termination, the owner of Kinsdale (“Sherry”) had made several comments to SG about the financial state of Kinsdale. These difficulties were exacerbated by the onset of the COVID-19 pandemic such that, on December 16, 2020, Kinsdale provided all staff, including SG, with notice that Kinsdale would permanently close its doors on December 31, 2020. SG testified that she was shocked to receive the notice of closure, despite the fact that she had been privy to the company’s financial records for many years and she had been advised by Sherry on numerous occasions that Kinsdale was in dire financial straits.

Employer Attempts to Help Terminated Employees Find Reemployment

Sherry testified that the financial status of Kinsdale placed the company in such a position that continued operations were untenable, despite her best efforts. Sherry endeavoured to assist each and every one of her employees to obtain comparable work as quickly as possible, to which end she reached out to multiple close industry contacts to advise of the upcoming availability of many of her employees. In specific respect of SG, Sherry reached out to the owner of Zehr Transport (“Jack”), and another transport company that operated under the name “Seaboard”. Sherry advised both Jack and Seaboard that SG, a dispatcher, would soon be in need of employment, and insisted that SG’s salary ($21/hour), benefits and hours must remain the same in any new position she would be offered.

Terminated Employee Declines Job Offer as Dispatcher

Subsequent to his conversation with Sherry, Jack scheduled an interview with SG for a dispatcher position. SG attended an interview with Jack’s stepdaughter, Jenn, who verbally offered SG the position of dispatcher during the meeting, the details of which were to be confirmed in writing upon SG’s acceptance. The position offered the same salary, benefits and hours as that provided by the position SG held with Kinsdale. Although SG appeared enthusiastic about the position during the interview, she ultimately contacted Jack the following day and declined the position on grounds that it was a dispatch role, whereas SG preferred to work as an accounts receivable clerk and did not enjoy dispatch work.

Sherry then provided SG with the contact information for Seaboard, and SG reached out to them to discuss possible employment. Unfortunately, Seaboard did not have any open positions that were suited to SG, and Seaboard advised SG that any job that would become available in the future, would be based at Seaboard’s Sarnia location, which would necessitate a four-hour daily commute for SG.

Employer Claims Lack of Mitigation Precludes Award of Reasonable Notice Damages

SG did not secure reemployment immediately after her termination from Kinsdale. Instead, she completed an online bookkeeping course and eventually secured a position with a transport company in July of 2021, following which she eventually obtained a position with an insurance company in December of 2021.

SG commenced a lawsuit seeking reasonable notice damages for the wrongful termination of her employment with Kinsdale. In response to her claim, Kinsdale contended that in fact, SG’s failure to appropriately and reasonably mitigate her damages, by declining the offer of employment with Jack, constituted a failure to mitigate such that SG was not entitled to any amount of reasonable notice damages.

The Principles of Mitigation in Employment Law

Every person who is terminated from their employment owes an obligation to mitigate the damages occasioned by their dismissal, “by seeking comparable employment, which is… employment comparable in status, hours and remuneration to the position held at the time of dismissal”. Importantly, comparable employment does not mean identical employment, but merely “a comparable position reasonably adapted to [the plaintiff’s] abilities”.

Although every dismissed employee bears the onus of mitigating the damages that arise from wrongful termination, it is the employer who bears the burden of proving the failure to adequately mitigate. To that end, an employer may prove that an employee has failed to mitigate their damages by demonstrating:

1. that the employee in question failed to take reasonable steps to seek comparable employment; and
2. that had the employee taken the necessary steps, they would have secured comparable employment.

Terminated Employee Attempted to Separate Herself from the Role of Dispatcher

Kinsdale asserted that SG had failed to mitigate her damages in that she had declined the position of dispatcher that had been offered to her by Jack. Moreover, Kinsdale noted that Sherry, the owner of Kinsdale, had made extraordinary efforts to assist SG to find alternative employment, but that SG rebuffed or declined such assistance, including the position available with Jack.

In reviewing the evidence, the court noted that SG had made every attempt, throughout the trial, to distance herself from the role of “dispatcher” in favour of describing herself as an accounts receivable clerk. However, the evidence indicated that in fact SG did perform the duties of dispatcher, for at least the final five years of her employment with Kinsdale, during which her assigned job title was “Dispatcher”.

Moreover, the court rejected SG’s assertion that she had never received an offer of employment from Jack and that, even if she had, it had not constituted employment comparable to the position she held with Kinsdale. Rather, the court concluded that the meeting between SG and Jack did, in fact, constitute an interview, not an “exploratory meeting” as suggested by SG, and that SG had in fact received a verbal offer of employment as a result of that meeting.

Court Concludes that Job Offer was “Comparable Employment”

SG asserted that she was under no obligation to accept a full-time dispatch position, as this would differ quite greatly from the position SG occupied with Kinsdale. The court agreed, but noted that a full-time dispatch position was not what had been offered to SG by Jack; rather, the court was satisfied that the position offered to SG by Jack was of a similar nature to that occupied by SG with Kinsdale, and that the Jack offer thus constituted “comparable employment”.

The court further noted that “Sherry went out of her way to find suitable employment for her employees” and that “[w]hile SG wanted to ‘see what’s out there’ and pursue on-line courses, it should not fall to the defendant to fund her educational pursuits”.

Employee Not Entitled to Reasonable Notice Damages

As a result, the court concluded that “it cannot be the law that a dismissed employee can elect to take further training for self-employment and charge that to the employer, unless the employee cannot obtain alternative suitable employment”.

As the court was satisfied that a valid offer of comparable employment had been extended to SG by Jack in December of 2020, and that SG had chosen to reject that offer in favour of pursuing education and other opportunities, failure to mitigate had been proven such that SG was not entitled to any amount of reasonable notice damages.

Contact Guelph Employment Lawyer Peter McSherry for Trusted Representation in Wrongful Dismissal Cases

If you find yourself with questions about your employment relationship or employment contract, or are seeking damages for wrongful or constructive dismissal, it is important to seek legal advice immediately to ensure that you are aware of your rights and options. The skilled employment law team at the Law Office of Peter McSherry is here to help. From our office in Guelph, we provide clients with capable, knowledgeable, skilled representation in all facets of employment law. To learn more about how we can assist you with your employment law matter, contact us online or by telephone at 519-821-5465.