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Time to call it a day?

Duty to mitigate for older workers who are dismissed

By Jeffrey R. Smith

One of the big concerns for employers when considering to dismiss an employee without cause — and with such a high bar for proving just cause, dismissal without cause is usually the way to go — is how much notice to which the employee is entitled.

Reasonable notice entitlement — or pay in lieu of — is determined not just by employment standards minimums, but also the common law, which takes into factors such as the employee’s age, position, and likelihood of finding a similar position. Unless the employment contract specifically limits the notice entitlement to the legislative minimums, then it’s the common law notice that can rack up the dollar signs for certain employees.

Given the characteristics that factor into the length of notice entitlement, it’s safe to say dismissing long-term employees without cause is going to cost more than short-term employees. The same can be said for dismissing employees in key and highly-skilled positions.

The purpose of notice of dismissal — whether working notice or paying employees the equivalent of what they would make during the notice period — is to help employees bridge the gap between jobs and give them a chance to look for new employment. This purpose means employees also have a responsibility to make reasonable efforts to find new employment — the duty to mitigate their damages that stem from the dismissal.

However, while older employees may have a harder time finding work, they may also be less interested in looking as they edge closer to retirement. This was the case for a 59-year-old British Columbia employee who was dismissed from his financial services manager position and won a wrongful dismissal suit recently. Over the period of one year after his dismissal, the man inquired about a few jobs, but not enough for a court to determine he had fulfilled is duty to mitigate his damages. So while he was entitled to damages from the company for notice, the amount was reduced for his failure to mitigate.

But while the employee didn’t try very hard to mitigate, the court took into account his age and determined it wouldn’t reduce the notice period as much as it might have for someone younger, because he was less likely to find comparable work at age 60.

“In my view, the fact that (the employee) is 60 means that it was less likely that alternative employment would have been achieved,” said the court. “It is only for that reason that I have not reduced more substantially the applicable notice period.”

This raises the question of whether employees who are dismissed at a certain age should even have a duty to mitigate their damages. If age and the likelihood of finding alternate employment are significant factors in determining their notice entitlement, is there a threshold where they shouldn’t be expected to find work at all after having their employment terminated?

See Dodge v. Signature Automotive Group Ltd., 2014 CarswellBC 2284 (B.C. S.C.).  

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Jeffrey R. Smith

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective.
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