“No Free Pass”: Ontario Superior Court rules that dismissed employee failed to mitigate damages by retraining

In the recent wrongful dismissal case, Benjamin v. Cascades Canada ULC, 2017 ONSC 2583 (“Benjamin”), the Ontario Superior Court of Justice found that an employee failed to mitigate his damages by deciding to retrain rather than apply for available comparable positions. The decision clarifies that wrongful dismissal is not a “free pass” for the employee to embark on a new career path by retraining during the reasonable notice period if that employee could instead procure employment that is comparable in nature and remuneration.

Background

On May 12, 2016, Patrick Benjamin was terminated without cause, along with 41 other employees, from his position as an unskilled general labourer with Cascades Tissue Group Toronto. To provide job search assistance, Cascades sent the terminated employees a weekly email newsletter with job opportunities at its other locations and with other companies. On May 18, 2016, Mr. Benjamin received a newsletter, which advertised three positions at Cascades’ other locations in the Greater Toronto area for which Mr. Benjamin was qualified. The positions were comparable to his former position.

Mr. Benjamin did not apply for any comparable positions, including those listed in Cascades’ weekly newsletters. Rather, by early June 2016, Mr. Benjamin decided that he wanted to gain more control over his hours and was worried about his job security as an unskilled labourer in Ontario’s manufacturing industry. So, he enrolled in a six-month welding program. Mr. Benjamin did not seek new employment until late February 2017 when he began applying for welding jobs.

Cascades paid Mr. Benjamin approximately eight months’ salary in lieu of notice under the Ontario Employment Standards Act, 2000. Mr. Benjamin commenced an action for wrongful dismissal, alleging that he was entitled to 24 months’ common law notice, less the amount paid. Cascades sought summary judgment dismissing the action, claiming that Mr. Benjamin failed to reasonably mitigate his losses.

The Ontario Superior Court Decision

The Court dismissed the action, finding that Mr. Benjamin failed to mitigate his damages by electing to retrain rather than apply for comparable positions. The Court held that Mr. Benjamin’s  entitlement to wrongful dismissal damages ended in June 2016 when he stopped seeking available alternate employment.

The Court held that a dismissed employee’s decision to retrain does not itself prove a failure to mitigate damages. Retraining can be reasonable mitigation in cases where the employee tries to find new employment but comparable positions are not available, or where the employee is unable to continue working in their former role (e.g. where injury necessitates a career change). Here, however, Mr. Benjamin failed to meet the duty to mitigate because several comparable job opportunities were available and he failed to apply for them.

Key Takeaways

Benjamin is an important reminder that the duty to mitigate may prevent dismissed employees from collecting damages for common law notice if during that period, they (i) chose to retrain instead of pursuing reasonably comparable employment opportunities, and (ii) could have procured such comparable employment. Although retraining can constitute reasonable mitigation in certain cases, employers will not be required to fund retraining through the payment of reasonable notice for employees that could have procured a similar position instead.

If you have any questions about retraining by dismissed employees and how it impacts the mitigation analysis, please do not hesitate to contact a member of our Labour and Employment group.

mitigation termination of employment

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