Michael Ford
Employment & Labour

Employee who went to welder school failed to mitigate

By Barry B. Fisher

In Benjamin v. Cascades Canada ULC (2017 ONSC 2583) Justice Glustein was faced with assessing the correct notice period for an unskilled general labourer with 28 years service who, upon termination, was only given his Employment Standards Act (ESA) minimum payment of 34 weeks.

The major issue was whether or not the plaintiff had reasonably mitigated his damages.

The relevant facts were as follows:

  1. He was terminated on May 12, 2016 as part of a plant closure that involved 41 other employees.
  2. He decided to retrain as a skilled welder and thus attended full-time school for six months from August 2016 to February 2017. Because of this, he did not apply for any job prior to the motion for summary judgment, which was held on April 10, 2017. He also did not attend the outplacement counselling or coaching offered by the defendant.
  3. His reason for choosing retraining was so that he could improve his skills and so that he could restore himself to his former job security and income.
  4. Cascades brought to his attention three comparable positions at other plants run by the defendant. He ignored all of these opportunities. This was part of a program run by the defendant to bring to the attention of all terminated employees job opportunities both inside and outside Cascades. The defendant led evidence to the effect that had he applied for any of these positions, he likely would have been accepted.

The judge then reviewed the law on mitigation:

[88] The leading case on the duty to mitigate in wrongful dismissal cases is Michaels. In Michaels, Laskin C.J. held that:

(i) an employee is required to mitigate damages arising from wrongful dismissal;

(ii) the onus is on the employer to establish a failure to mitigate; and

(iii) the onus requires the employer to establish that (a) the employee did not take reasonable steps to seek comparable employment, and (b) if the employee had done so, the employee could have procured such comparable employment.

On the onus issue, the judge had to decide whether the test required the employer to prove that the employee could have obtained alternative employment or would likely have obtained alternative employment.

[106] I agree that there are differences between establishing a “could have” onus as compared to a “would likely have” onus. For the reasons that follow, however, I find that the Michaels test sets out a “could have” onus and it is the proper approach to follow.[6]

[107] The court in Cimpan v. Kolumbia Inn Daycare Society, 2006 BCSC 1828 (CanLII) (“Cimpan”) addressed the submission of the employee in a wrongful dismissal case that that an employer seeking to discharge its onus to establish a failure to reasonably mitigate ought to be required to prove that the dismissed employee “would have” been able to secure a particular job with another employer. Truscott J. rejected that submission. He held (Cimpan, at para. 108):

While the onus is on the defendant to prove the plaintiff has not mitigated, it would be impossible for any employer to prove that the employee would have been able to secure a particular job.

[108] Counsel for Benjamin agreed that an onus requiring employers to establish that the employee “would have” obtained a comparable position would be logically “impossible” and is not appropriate. I agree for the reasons of Truscott J. in Cimpan.

[109] However, to increase the onus on an employer to show that the employee “would likely” have obtained an available comparable position, as submitted by Benjamin, raises similar concerns as in Cimpan. Under such a proposed test, employers would somehow have to establish the “likelihood” of a dismissed employee obtaining a comparable job, potentially requiring the employer to lead evidence as to the number of candidates applying for a job with another employer,[7]and knowledge of the particular aspects of a candidate’s resumé that might be attractive to other employers.[8]

[110] While the “would likely” test is not logically impossible in the same sense as the “would have” test discussed in Cimpan, it is nevertheless inconsistent with Michaels and is unreasonable.

[111] In essence, the test proposed by Benjamin would require an employer to prove the “odds” of a terminated employee obtaining a comparable position with another employer. That approach is not consistent with the Michaels test that the onus is on the employer to establish that “by the exercise of proper industry in the search, [the employee] could have procured other employment of an approximately similar kind reasonably adapted to his abilities”. [Emphasis added]

[112] It is not clear in either Fisher or Yiu that the court is attempting to impose a different onus on employers than the “could have” test in Michaels. In Fisher, Perell J. relies on Di Tomaso, which follows the Michaels analysis. In Yiu, D. Brown J. follows the analysis of Echlin J. in Link v. Venture Steel Inc., 2008 CanLII 61389 (QC SAT), [2008] OJ 4849 (SCJ) (“Link”), in which Echlin J. held (Link, at para. 49):

Nevertheless, it remains incumbent upon Venture to lead evidence that Link failed to pursue alternate employment opportunities that were of a comparable nature and that such opportunities were not only available, but that if pursued, Link could have minimized the damages sustained. [Emphasis added][9]

[113] On appeal (cited as Link v. Venture Steel Inc., 2010 ONCA 144 (CanLII)), the court upheld the decision of Echlin J. on the mitigation issue (and allowed the appeal in part on another issue). The court held that the mitigation defence of the employer could not succeed because the employer had not led any evidence about the availability of comparable employment, a factor consistent with the “could have” onus under Michaels. O’Connor A.C.J.O. held (Link (CA), at para. 73):

Because Venture did not lead any evidence about the availability of suitable employment, the trial judge concluded that Venture had not met the second prong of the test set out above.[10]

[114] In none of the above cases do the courts suggest that they are seeking to alter the onus as set out in Michaels. If there is any uncertainty as to whether the employer is required to establish that the employee “could have” obtained comparable employment or “would likely” have obtained comparable employment, I would adopt a “could have” test based on the decision in Michaels and my reasons discussed above.[11]

On the issue of choosing to retrain during the notice period, the judge said:

[116] A decision by a terminated employee to seek retraining is not, on its own, a basis for an employer to submit that the employee failed to reasonably mitigate damages.

[117] However, if the employer meets the Michaels test and establishes that (i) the employee did not take reasonable steps to seek comparable employment “by the exercise of proper industry in the search”, and (ii) if the employee had done so, the employee “could have procured” such comparable employment, then the employee cannot choose to engage on a new career path as a “charge” to the employer.

[118] Such an approach maintains the onus on the employer to establish (as required in Michaels), that there were comparable positions available for the employee but the employee did not take reasonable steps to pursue those opportunities.

[119] Further, this approach maintains the Michaels principle that an employee must attempt to reasonably mitigate damages arising from wrongful dismissal.

[120] If the employer can establish that the dismissed employee (i) chose to retrain instead of seeking comparable positions, and (ii) could have procured that comparable employment, a dismissed employee ought not to have a “free pass” to change careers to enhance job security or obtain better hours, and then collect damages for notice simply because of dismissal. In those circumstances, an employer should not be required to fund retraining (through payment of reasonable notice) when the employee could have obtained comparable employment.relied upon by Cascades. Retraining on its own is not evidence of a failure to reasonably mitigate damages; rather, if an employer can establish that comparable work is available and the employee made a choice to retrain and not to seek comparable employment, retraining would not constitute reasonable mitigation.

 [148] In the cases relied upon by Benjamin, there was evidence as to efforts to find employment, the unavailability of employment, or other reasons why it was reasonable to make a career change, which allowed the courts in those cases to find that retraining was reasonable mitigation.

[149] In the present case, by contrast, the evidence is that comparable employment was available, which Benjamin could have procured had he taken reasonable steps to seek employment. In these circumstances, the decision to retrain does not constitute reasonable mitigation.

The next issue was one of timing. Does turning down a job to retrain for eight months simply mean you deduct eight months from the notice period or does the notice cutoff occur when the employee turns down the job?

[157] If a terminated employee chooses not to seek comparable employment that he or she could have procured after termination, the employee chooses to deprive the employer of the opportunity to avoid damages arising from the dismissal. If the plaintiff employee had made reasonable efforts and obtained such comparable alternate employment, the defendant employer would not have been exposed to any damages after that time. If the plaintiff had obtained the comparable position before the amount of months paid by the employer on termination, the plaintiff would not be entitled to damages.

[159] Consequently, I do not agree with Benjamin’s submission. I find that the applicable law is that the plaintiff is not entitled to recoverable losses as of the date the employer establishes under the Michaels test that the plaintiff fails to reasonably mitigate damages.

The plaintiff got zilch as he turned down the job opportunity, or technically did not pursue it, before the end of the ESA period that he was already paid for.

Does this mean that a dismissed cannot go to school during his notice period? Is he or she stuck in the rut of having to look for another dead end job, just like the one he or she was terminated from?

NO.

The plaintiff simply has to do two things at the same time:

  1. Take the retraining or schooling to improve their future, AND
  2. Look for comparable jobs.

Remember, the easiest thing to do in the whole world is to not get a job offer following a less than great interview for which you, unfortunately, were 15 minutes late for because your alarm was not working, or the TTC was slow or your dog was sick.

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