The Importance of Mitigation

Written on behalf of Peter McSherry

It is absolutely essential for terminated employees to mitigate their damages and document their job search following their dismissal.  A recent decision illustrates the expensive consequences for not complying with the obligation of mitigation.

Background

The employee in question was a Senior Customer Service Agent who was 45 years old and had been with the employer for 14 years at the time of her termination. She alleged she was wrongfully dismissed without notice while she was ill and off work and took the position that she was entitled to a reasonable notice period of between 14 and 18 months (given her age and the longevity of her employment) as well as $135,000 in damages, including bad faith (i.e. Honda v. Keays) damages.

The employer, a furniture company, claimed that they had fired the employee for cause as she had failed to provide medical documentation to support her absence from work in violation of the company’s sick leave policy. The employer argued that the appropriate notice period was between 8 and 10 months given the employee’s administrative position and relatively low salary.

The Court’s Findings

The Court accepted that the employee was off sick for some time in September 2010 and that she did not provide the employer with any doctor’s notes notwithstanding three requests by the employer for her to do so. Prior to her termination, she had been warned that if she did not provide a doctor’s note or return to work she would be fired. The employee did not provide the doctors notes until after she was terminated.

The Issue of Just Cause

The Court found that the employee had done nothing illegal or dishonest. She had simply called in sick (when she was actually sick). The Court acknowledged that they employer was “understandably dubious” about whether the employee was really ill, given her past history of apparent insubordination, however, ultimately found that, while the employee’s behaviour was inappropriate the termination of her employment was “disproportionate to the misconduct in question”.  Her actions did not justify a just cause dismissal.

Reasonable Notice

Taking into account the employee’s character of employment, her length of service, her age at the time of termination, and the lack of any evidence pertaining to the employee’s alleged medical condition as well as the lack of effort to find similar employment following her termination, the Court found that the appropriate notice period was 10 months.

Mitigation

The employee acknowledged that, following her termination, she did not begin to look for alternative employment until 15 months had passed. When asked about mitigation, the employee  argued that her medical condition prevented her from looking for work prior to that time. She had not filed any medical evidence in support of her allegation that she could not work in that period of over a year.

In light of the absence of any medical evidence supporting her failure to mitigate, the Court reduced the notice period by 4 months to 6 months.

Bad Faith Damages

The employee argued that the employer acted in an unfair and callous manner when they terminated her over the phone while she was away sick, and despite her long tenure at the company. She further claimed that after she filed her wrongful dismissal claim, her former manager called her and attempted to intimidate her into withdrawing the lawsuit.

The Court found that:

• There was no medical evidence to suggest that the employee had suffered any mental distress beyond the normal distress and hurt feelings that arise from termination generally;
• The employer did not know about the seriousness or true nature of the employee’s illness as she had not provided any documentation or information about her medical condition;
• While the manager did call the employee after he received her wrongful dismissal claim, there was nothing improper in him doing so, as the purpose for the call had been to ask the employee what she was seeking in terms of a settlement, and caselaw has established that “parties are always entitled to deal with each other directly”;

The Court ultimately dismissed the employee’s claim for bad faith damages was dismissed since the employer’s conduct was “not one of the exceptional cases that can be described as ‘harsh, vindictive, reprehensible and malicious’” such that bad faith damages would be warranted.

Final Damages Awarded

The Court awarded the employee damages for wrongful dismissal calculated on the basis of six months’ notice, amounting to $20,904.

If you have been terminated and have questions about your rights, contact Guelph employment lawyer Peter McSherry by phone at 519-821-5465 or by e-mail to schedule a consultation today. I can protect your rights, advocate for your best interests with employers, and ensure your case is handled properly and efficiently for a fair settlement.