Written by Daniel Standing LL.B., Editor, First Reference Inc.
Employees who are unjustly dismissed cannot simply sit back, relax and wait for their payday in court. They have a duty to mitigate their losses by taking reasonable steps to find work elsewhere. In Wilson v Pomerleau Inc., 2021 BCSC 388 (CanLII), the plaintiff learned this the hard way, seeing his damages reduced on account of his lax approach to mitigating his losses.
Richard Wilson was an experienced estimator in British Columbia’s commercial construction industry. His most recent position was with Pomerleau and its predecessor, where he had worked for 10 years until his dismissal in March 2020. His job involved managing, supervising, training and mentoring from two to six staff members in his department for the company’s BC region. He also estimated bids relating to building and renovation work on a wide variety of construction projects involving earthworks, road building, as well as highways, bridges and overpasses. While Mr. Wilson saw himself as a high-ranking employee with a narrowly specialized skillset, the company viewed him as a lower-ranking employee who was very employable in a variety of settings.
Of particular significance, Mr. Wilson was 65 years old at the time he lost his employment, earning nearly $200,000 in 2019, plus benefits. When he was dismissed, the company paid him the equivalent of eight weeks’ wages as required by BC’s Employment Standards Act.
What happened (or didn’t happen) after that was a source of controversy. Mr. Wilson claimed that in the following eight months, he was unable to find comparable employment despite making diligent efforts. Pomerleau disputed that, claiming that Mr. Wilson had made almost no effort at all to find a new job. Pomerleau had no dispute about the wrongfulness of the dismissal. This lawsuit was all about how much reasonable notice it owed to Mr. Wilson.
The court’s decision
Frequent readers of our articles are very familiar with the test courts apply to determine how much reasonable notice a wrongfully dismissed employee is entitled to. The test originated in the foundational case of Bardal v Globe and Mail Ltd., a 1960 Ontario decision. It held that there is no one-size-fits-all calculation or array of factors that will always apply, but that generally, the result will be based on the nature of the employee’s job, age, length of service, skills and qualifications, as well as the availability of similar employment elsewhere.
The court began its analysis of these factors with a discussion of the impact of an employee’s advanced age. Courts have consistently recognized that compared to younger people, those who are in the twilight of their working lives have a harder time finding alternate employment. The court said that this is based on common sense: employers will be reluctant to put time and resources into hiring and training someone who is likely to soon leave the workforce. There is no bright line as to when an employee crosses the threshold of “advanced age,” but the court cited various cases from British Columbia where this principle was applied to plaintiffs as young as 50 years old.
Moving on to the nature of Mr. Wilson’s employment, the court was unwilling to accept the plaintiff’s narrow description of his skillset as one that was limited to estimating road building and large highway interchange and overpass projects. The evidence showed that his skills went well beyond that to estimating work for a wide range of construction projects. Furthermore, there was no evidence of a lack of estimating jobs, so the court rejected Mr. Wilson’s suggestion of a stagnant job market. As for Mr. Wilson’s tenure, the court noted that 10 years was found by another case to be “quite long enough” to support a 20-month notice period for a 55-year-old engineer. Using these parameters, the court considered the basic facts of the various cases submitted by both parties before concluding that 18 months was a reasonable period of notice. This, the court said, was based largely on Mr. Wilson’s age which would “very much affect his job prospects.”
But this was not a total win for the plaintiff. First, the court made a contingency deduction at Pomerleau’s request. The point of such a deduction is to prevent a plaintiff from double recovery or obtaining an unfair windfall when a court grants judgment long before the notice period is due to expire. Case law holds that a contingency deduction is inappropriate when the plaintiff properly mitigates his or her loss. For reasons yet to be explained, the court found that Mr. Wilson failed to mitigate his loss. Therefore the court made a contingency deduction, reducing the notice period to 17 months.
Lastly, the court considered Mr. Wilson’s duty to mitigate his losses. The law on this issue states that a dismissed employee must take reasonable steps to find equivalent work somewhere else. Practically, this means making constant and diligent attempts to secure a comparable job. The purpose of doing this is not to help the employer in any way; rather, it is what a reasonable person is expected to do in his or her own professional and financial interest. The onus is on the employer to first prove that the plaintiff failed to mitigate. Second, it must show that if the plaintiff had taken reasonable steps, he or she would likely have found equivalent or alternate employment.
In this case, the court was very critical of Mr. Wilson’s attempts at mitigation. It noted the “paucity of evidence concerning what he did.” The court found that Mr. Wilson made only “meagre efforts” to find new work and failed to pursue certain opportunities that were available to him. For example, there were several Chief Estimator or Senior Estimator positions in the area for which Mr. Wilson could have applied, but his lack of awareness that these positions even existed showed how cursory his job search was. Other factors on this point included his failure to seek a letter of reference from Pomerleau, and a lack of discussion about alternate employment with the contacts he had built up over 40 years in the industry. The court distilled Mr. Wilson’s mitigation attempts as follows: “For the most part, his entire effort appears to have been directed toward the occasional review of only four job websites.” The court reduced the notice period by one more month, arriving at a total notice period of 16 months. To this amount, the court awarded further damages representing Mr. Wilson’s losses under his rights to profit sharing and medical coverage during the notice period.
The employee’s duty to mitigate his or her loss can bring about a reduction in the employer’s financial liability following a termination without cause. Following the termination of employment, it goes without saying that the employer should not put any undue roadblocks in the way of an employee mitigating his or her loss, such as refusing to provide a letter of reference. Employers can also assist former employees in their mitigation efforts by providing them ongoing notice of available comparable positions in other organizations. Staying aware of the state of the job market and taking reasonable steps to assist former employees in their mitigation efforts can be a good strategy for avoiding allegations of bad faith, and it can provide a possible evidentiary basis for arguing that a former employee failed in his or her post-termination duty to mitigate.