When an employee is dismissed from his/her position, they have a duty to seek alternative employment to “mitigate their damages”. Failing to mitigate results in a reduction of damages that a plaintiff would otherwise receive. A recent British Columbia decision suggests if an older employee fails to mitigate, the reduction in damages will not be as significant compared to a younger employee in the same circumstances.
In Dodge v. Signature Automotive Group Ltd. 2014 BCSC 1452, Edwin Dodge had worked for his employer for 20 years. His most recent role was financial services manager where he earned approximately $115,000 per year. In 2013, after a slowdown in his production he was terminated from his job without notice at the age of 60. He brought an action against his employer for wrongful dismissal.
It was clear that Mr. Dodge had been wrongfully dismissed. The employer’s argument focused on the fact that Mr. Dodge did not properly mitigate his damages, and therefore his award should be reduced.
The Court first considered the principles relevant to mitigation. At para 15, the Court cited from Smith v Aker Kvaerner Canada Inc. and Kvaerner Power Inc., 2005 BCSC 117:
In seeking and accepting alternative employment, the plaintiff has a duty to act reasonably and to take such steps as a reasonable person in the plaintiff's position would take in his own interest to maintain his income and his position in his industry, trade or profession. The duty involves a constant and assiduous application for alternative employment, an exploration of what is available through all means.
Mr. Dodge’s mitigation efforts were found to be less than satisfactory. Throughout 2013 he did not even have a resume to show to potential employers. Up to the date of trial, Mr. Dodge had applied for 7 jobs (the Court noting that two of those were the month of the trial and one or two in the month leading up to the trial). He had attended only one job interview.
The employer gave detailed evidence of all the jobs that had been, or were available, after Mr. Dodge’s employment ceased. Evidence was also given that there were over 87 car dealerships in the Lower Mainland where Mr. Dodge could have inquired as to any available positions. The Court determined Mr. Dodge did not do enough to find new work, noting:
It is never easy to pound the pavement and knock on doors after one has been let go from a job, particularly after many years. But it is, nonetheless, the duty of a plaintiff employee to act reasonably so as to secure new work if it is available. In my view, it was impossible for the Plaintiff to know what the job market held for him when he did not do enough to learn what the prospects really were. Literally knocking on doors, leaving resumés, asking to have lunch and taking other such steps are necessary, certainly in retail car sales, where word of mouth and personal links appear to count for a great deal.
Before considering mitigation, the Court found that, Mr. Dodge would have received 17 months of pay in lieu of notice. He was awarded 14 months after a reduction for his failure to mitigate. Interestingly, the Court stated that they would have reduced the award even further for his failure to mitigate if not for Mr. Dodge’s age. The Court determined it was less likely Mr. Dodge would be successful in mitigating his damages as a result of his age.
What this Means for Employers
Although the employer was successful in this case in proving Mr. Dodge did not mitigate his damages, it will not always be so simple. The onus is on the employer to prove a failure to mitigate. Giving evidence of similar available jobs and the plaintiff’s failure to apply for those jobs can assist in showing the plaintiff failed to make reasonable efforts to mitigate. The age of a terminated employee will always be a relevant consideration in determining the amount of notice he or she is entitled to, however, as seen in this case, it may also impact mitigation considerations. Age has factored into other mitigation arguments. For example, older employees who have established roots in their communities are not required to accept employment far from their home in order to mitigate (see the Ontario Court of Appeal decision in Peet v. Babcock & Wilcox Industries Inc., 197 D.L.R. (4th) 633 (Ont. C.A.). In the British Columbia decision of Allen v. CP Express and Transport Ltd.,  B.C.J. No. 2074, the Court found it was unreasonable to expect a 54 year old to move or commute daily in order to mitigate.
For more information, please contact Ryan Seymour at coxandpalmer.com.
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Does Age Have An Impact on a Dismissed Employee’s Duty to Mitigate?