Nov 28

Ontario Court of Appeal Reviews and Clarifies the Law on Mitigation

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In Lake v. La Presse , 2022 ONCA 742, the Ontario Court of Appeal held that the motion judge erred in discounting an award of eight months’ notice by two months’ for failure to mitigate. In its decision, the Court of Appeal reviewed and clarified the law on mitigation.

Facts

The appellant worked for a daily online French language newspaper based in Montréal. She was hired in August 2013 and worked for the respondent for five and a half years as General Manager. She was the most senior employee in the Toronto division, reporting to the Vice-President of Sales and Operations in Montréal. In this capacity she managed the sales team to generate advertising revenue in Toronto and English Canada. At one time, she had thirteen direct reports, and at the date of dismissal she had eight. The appellant’s compensation consisted of an annual base salary of $185,000, with a car allowance, annual bonus, pension, and other benefits. She was 52 years old at the date of her dismissal.

Following her termination, the appellant remained unemployed for two years and was still unemployed at the date of the summary judgement motion. The motion judge determined that the appellant’s reasonable notice period was eight months’ but that the award should be reduced by two months’ due to the appellant’s failure to take appropriate steps to mitigate her damages. She applied for a total of eleven jobs in the period prior to the summary judgement motion. 

The Summary Judgement Decision

The motion judge provided the following reasons for reducing the award by two months:

  • The appellant waited too long before beginning her job search. There was a delay of over two months before she started applying for new positions.
  • The appellant “aimed too high” by applying for Vice President roles, which according to the motion judge constituted a promotion, when she should have applied for less senior roles.
  • The appellant’s job search was inadequate and she applied for too few positions. 

According to the motion judge, had the appellant expanded her job search, searched earlier, and applied for more positions, her chances of obtaining a position would have improved significantly:  

…Although there is no direct evidence in front of me of other positions that the [appellant] could have applied for, I find it is reasonable to assume that they existed. If vice-president roles were available, more junior roles were also available. The [appellant] chose unreasonably to limit her job search, which had a corresponding impact on her ability to find work.

The Court of Appeal Decision

The Court of Appeal agreed that the appellant had waited too long to start her job search but found that the motion judge had erred on all other grounds. 

The Court reiterated that a dismissed employee is permitted to limit their job search to comparable positions:

The motion judge erred in principle when, at para. 65, she accepted that, in mitigation, after a reasonable period of attempting to find similar employment, a dismissed employee must begin searching for a lesser paying job […], and then, at para. 68, she concluded that the appellant should have applied for a sales representative role if she continued to remain unemployed. The obligation of a terminated employee in mitigation is to seek “comparable employment”, which typically is employment that is comparable in status, hours and remuneration to the position held at the time of dismissal […]. There was no obligation for the appellant, to seek out less remunerative work, including by working as a sales representative.

The appellant had taken substantial steps to mitigate. She had a detailed job log that included her daily search efforts. She had used keywords to search for positions with comparable responsibilities to her previous position. She also engaged in networking and career counselling services provided by her former employer as well as private coaching.

In particular, the Court found that the motion judge had placed undue emphasis on job titles without looking beyond the title to determine whether the potential position had comparable status, responsibility, and remuneration to her previous role. On cross-examination, the appellant gave evidence that she was searching for Toronto-based senior roles with management responsibilities as this was her expertise and skill set. The positions she applied to, regardless of job title, matched her work experience and qualifications. The respondent did not offer any evidence to counter these assertions. The motion judge erred as nothing in the record supported the conclusion that the appellant failed to make reasonable efforts.   

The motion judge also erred in assuming that had the appellant applied for lower-level positions, she would have mitigated. The Court emphasised that while reasonable inferences are acceptable when grounded in proven facts, they become inappropriate in the absence of evidence supporting such conclusions. The inference that “more junior roles” existed didn’t necessarily imply that the appellant would have secured comparable employment; it merely suggested an improved likelihood of securing a position

Takeaways

This decision reviews and clarifies the law on mitigation:

Under the test for mitigation, the defendant must prove:

  1. That the plaintiff failed to take reasonable steps to mitigate her damages; and
  2. That if she had done so she would have been expected to secure a comparable position reasonably adapted to her abilities.

Employees are not obligated to search for lower paying positions after a period of searching for comparable employment:

“The obligation of a terminated employee in mitigation is to seek “comparable employment”, which typically is employment that is comparable in status, hours and remuneration to the position held at the time of dismissal […]. There was no obligation for the appellant, to seek out less remunerative work, including by working as a sales representative” (para 19). 

The focus should be on job duties, not on the title of the role when assessing if jobs are comparable:

“Without evidence contradicting the appellant’s assertion that the vice-president roles had similar job responsibilities to her previous employment, the motion judge speculated, based on the title of the positions alone, that such positions were not comparable” (para 25).

The onus is on the employer to prove a failure to mitigate. That arguement will benefit from affirmative evidence:

“In the absence of affirmative evidence from the respondent, or any suggestion in cross-examination that the appellant failed to apply for an available position that was comparable in nature to her former position, the record did not support the motion judge’s conclusion that the appellant failed to make reasonable efforts to mitigate her damages” (paras 27-28).

Although the Court of Appeal agreed that the appellant waited too long to start her job search, that fact alone was not sufficient to support a reduction in damages. It appears that it is not enough to show that comparable positions may have been available as the test requires the employer to prove that the employee would have found comparable employment if reasonable steps had been taken. This is a very high standard for an employer to meet.

This article was written by Thomas Perry. Thomas is licensed by the Law Society of Ontario and is an Employment Lawyer at Monkhouse Law.

Monkhouse Law is an employment law firm located in Toronto focusing on employees’ issues. Please contact us at 416-907-9249 or fill out this quick form for a free 30-minute phone consultation.