Employment & Labour

Don't forget to mitigate in employment claims

By AdvocateDaily.com Staff

The duty to mitigate their losses often comes as a nasty surprise to plaintiffs with constructive and wrongful dismissal claims, Toronto employment and human rights lawyer Christopher Achkar tells AdvocateDaily.com.

Achkar, founder of Achkar Law, says it can be a challenge to explain to clients with no legal background that common law damages in employment cases are intended to compensate for reasonable notice periods, reflecting the difficulty of finding a new job.

“Mitigation is a completely unknown element of their claim until plaintiffs meet with an employment lawyer,” he says. “They tend to feel that it shouldn’t be any of their former employer’s business if they find another job and that they shouldn’t have any obligations to them after they are terminated.”

As a result, Achkar spells out the duty to search for fresh employment during the notice period in his retainer agreement with plaintiff clients and talks them carefully through their obligation to search for new work.

“By helping them walk in the shoes of an employer, you can help put things in perspective,” he explains, adding that he likes to provide the example of a family-run convenience store in order to place some distance between the client and the emotion they feel about their own case.

“It’s unfair to expect a small business like that to pay for someone to sit at home doing nothing, in addition to hiring a new person to fill the spot they left,” Achkar says.

He says the level of effort considered acceptable in a plaintiff’s job search differs from judge to judge and will also vary according to the type of job they held.

“It’s pretty subjective," says Achkar. "Some judges are fine with one to three applications a week, while some will want to as many as 15 or 20 per week."

He says courts also recognize differences in seniority and job titles.

"If you’re a vice-president, they won’t expect you to apply to three positions every week because there isn’t that kind of abundance of openings. If you’re in an administrative position, the expectation is much greater because there are many more positions available.”

Either way, Achkar says fired employees must keep a record of all the positions they applied to and how far they progressed through the hiring process.

If a job search was successful, the plaintiff’s common law damages will be reduced in proportion to their earnings in the new position, he says.

For example, an employee fired from a $100,000 a year job after 12 years could be entitled to a full 12 months of reasonable notice under the common law. If the plaintiff manages to immediately find employment at the same rate, then their losses are considered fully mitigated and no common law damages are payable.

But if the new job only comes with a $50,000 salary, then the plaintiff is considered to have partially mitigated and the old employer may have to top them up to their old wage for the duration of the notice period.

However, Achkar says mitigation only applies to the common law notice period and has no effect on the minimum amounts owed to terminated employees under the Employment Standards Act (ESA), which equate to roughly one week of pay for every year the individual worked.

“If a person is fired after eight years and gets a new job at the same rate of pay the next day, they’re still getting eight weeks' pay under their ESA entitlements,” he explains.

Achkar says employers also have a role to play in the mitigation process and he encourages his employer clients to provide terminated employees with certain services to aid them in their search for a new job.

“You can put them in touch with placement services that can review their resume or help rehabilitate them if they've been out of the searching market for a while,” he says.

In higher-value cases, he says there’s almost no downside to sending former employees notices about openings at other companies.

“If they apply and land the job, then there's a good chance it’s going to reduce what the employer has to pay,” Achkar says.

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