Failure to Mitigate Leads to Reduced Dismissal Damages

By Lewis Waring, Paralegal, Student-at-Law, Editor, First Reference Inc.

In Moore v Instow Enterprises Ltd, (2021 BCSC 930) (“Moore”), a British Columbian employee was entitled to less notice than the standard amount of one month per year of service mainly due to his failure to mitigate his losses. By refusing to make a reasonable attempt to find alternative similar employment, the employee failed to meet his obligation to mitigate his loss of income as a result of his dismissal.

The dismissed employee fails to mitigate

The employer in Moore, Kal Tire, carried on business as a tire dealer and the employee, Bradley Moore, worked for the employer for 26 years until he was dismissed without cause on July 15, 2020. At the time of his dismissal, Mr. Moore was 53 years of age and was working for the employer as a senior sales representative. In his position, the employee was responsible for selling tires to large corporate clients such as the Vancouver Airport and UPS.

In March 2020, the employer suffered a significant downturn in response to the COVID-19 pandemic and so, in May 2020, the employer laid off hundreds of employees. On May 19, 2020, the employer informed the employee that he too was being laid off and that he should drop off his vehicle, laptop and cellphone.

On July 15, 2020, while the employee inquired about his record of employment and expense claims, the employer terminated him by giving him a termination letter and provided him with eight weeks’ pay in lieu of notice. This amount was far below the amount owed to the employee, which was equivalent to approximately one month per year of service. As the employment contract in Moore did not limit the employee to his minimum entitlements under the Employment Standards Act, 2000, he was therefore enabled to pursue damages in accordance with the common law.

At common law, the employee in Moore won 17 months of pay in lieu of reasonable notice. This amount was significantly less than he may have been entitled to due to the fact that the employee had failed to mitigate the financial losses incurred as a result of his dismissal. The employee’s failure to mitigate was a result of the employee’s failure to take a proactive and professional approach to job hunting. Although the employee had applied to a number of opportunities, his method of pursuing those opportunities lacked the effort necessary to give him any reasonable shot of landing any job he had applied for. For example, the employee sent resumes but did not include a cover letter and also failed to follow up with potential employers after sending his applications in. Thus, the employee’s lacklustre means of seeking alternative job opportunities after being wrongfully dismissed led to his damage award being reduced by three months. While the employee in Moore otherwise would have been entitled to 20 months, he was eventually awarded only 17 months.

Employee’s lack of quality job-hunting

The employee in Moore’s main failure in meeting his duty to mitigate his losses can be summarized as a lack of quality over quantity. While the employee did submit a number of job applications, each of his job applications lacked the professionalism and proactivity expected of an employee truly searching for work. While job applicants are almost always expected to submit a cover letter along with their resume, the employee in Moore failed to draft and include a cover letter in any of his applications. This lack of professionalism generally dooms an employee’s application from the beginning and almost all serious job hunters know this unwritten rule. Also, the employee in Moore failed to take any proactive steps such as follow up with his potential employers after submitting his resume, either by telephone or email.

This lack of follow-through demonstrated the employee’s passivity in submitting his applications, showing again a lack of serious pursuit of employment. In summary, the employee in Moore failed to conduct himself as a reasonable person in his circumstances would. Instead of merely submitting a resume, a reasonable person who had been wrongfully dismissed would be expected to do such things as “reaching out to contacts within the industry, writing cover letters setting out why you qualify for a position, following up with telephone calls, or email correspondence.”

Looking at the duty to mitigate

Moore illustrates the employee’s duty to mitigate losses after a wrongful dismissal. In Moore, the employee’s efforts to find alternative work following his dismissal failed to live up to the standard required by law, that is, the standard of making reasonable attempts to secure similar alternative employment. As usual, the notion of what is “reasonable” is clearly laid out in law but instead depends upon the circumstances in each individual case. The question of whether an employee has fulfilled his or her duty to mitigate is completely separate from the question of whether the employee has been wrongfully dismissed. Whether an employee’s dismissal is the result of an employer who has displayed egregious conduct or one who has merely employed a worker under a badly drafted contract, the employee’s duty to mitigate remains the same. Instead of focusing on the employer’s conduct, the question of mitigation revolves around what the employee should have reasonably done to find alternative work after being dismissed.

Regarding the duty to mitigate, the crucial word is “reasonable.” That is, the employee needn’t meet a standard of perfection but must only do what could be reasonably expected. In Moore, the employee’s efforts to find work by sending resumes without cover letters and by failing to reach out personally to potential employers were deemed to be below what could be reasonably expected of an employee in his circumstances. In other words, a reasonable employee who had been dismissed from a position in the commercial tire industry after 26 years of employment would be expected to take a fairly proactive approach in seeking alternative employment. While the employee in Moore did create a resume, search for jobs in the commercial tire sector, and apply for opportunities, these efforts were seen to be “passive, limited, and unduly narrow.”

Moore, therefore, demonstrates the fact that wrongfully dismissed employees may have to meet a fairly strict standard of mitigation if they want to obtain their full notice entitlements. That is an employee who thinks the mere act of applying for jobs may find they lose a substantial amount of their notice entitlements for being too passive. Also, employees who apply for jobs only within the specific sector of their familiarity may find they were expected to be more flexible. The duty to mitigate, in other words, is not fulfilled when an employee shows that he or she applied for a certain number of opportunities. Instead, an employee takes reasonable steps to find alternative employment only when he or she demonstrates a real attempt to find work. As most job hunters know, finding work requires presenting a professional resume with a cover letter as well as taking proactive steps such as reaching out to potential employers and taking the initiative in following up on e-mails and telephone calls.

Employers facing a wrongful dismissal suit should always explore the efforts of their former employees to find similar alternative work. Employees who fail to seriously and proactively search for job opportunities may be in danger of sacrificing a number of months of notice and thus saving their employer a significant amount of compensation in damages. While proving that an employee has failed to mitigate will never completely absolve an employer’s liability for wrongful dismissal damages, doing so can potentially save an employer thousands of dollars in the context of an extremely expensive lawsuit.