'It's not about doing the employer a favour, it's about living up to legal obligations'
“An employee is obligated to accept comparable employment if it comes their way during the common law notice period - and that doesn't mean exactly identical employment, it means comparable with the wages, the duties, and the responsibilities being similar, if not exactly the same.”
So says Madeleine Loewenberg, an employment lawyer, workplace investigator, and mediator at Loewenberg Psarris in Toronto, after an Ontario court dismissed a worker’s wrongful dismissal suit because the worker failed to accept an offer for a similar job that would have started shortly after her termination.
The worker, 60, was hired by Kinsdale Carriers, a trucking company in Woodstock, Ont., in the position of office personnel/accounts receivable in July 1998. Her duties included creating invoices and making deposits, filing, creating monthly reports, packaging and mailing orders, inventory counts, and completing weekly driver pay settlements.
In 2015, Kinsdale’s dispatch employee resigned and the owner took over some of the dispatch duties. She also assigned some dispatch work to the worker. A few months later, Kinsdale increased the worker’s pay to reflect her new dispatch role. The worker’s hours of work also increased while she continued to perform her accounts receivable and office duties.
According to the worker, dispatch duties could account for half of her daily tasks, but it varied. According to the owner, the worker’s dispatch work accounted for two to two-and-a-half hours each day and 10 to 12.5 hours per week. However, she asserted that the majority of the worker’s work involved dispatching and all of her tasks were directly or indirectly related to it, such as recording customer orders, making entries into the dispatch system, scheduling loads, and communicating with drivers.
Termination due to business closure
At the time the worker started the new role, there were around 10 transport drivers working for Kinsdale. However, when the pandemic hit in 2020, the reduction in business resulted in only four-to-six drivers being employed by the company.
On Dec. 16, 2020, Kinsdale delivered a notice of closure letter to all staff. The letter indicated that Kinsdale would close permanently as of Dec. 31. According to the worker, she had not been advised that the business would be closing or that her employment would be ending on a specific date. She was shocked that Kinsdale made the “drastic decision to permanently shut its doors and terminate everyone’s employment.”
All Kinsdale employees were provided with two weeks of working notice and benefits, accrued vacation pay, and statutory severance pay.
When a business closes down, the employer’s obligations are the same as they would be for any termination of employment, says Loewenberg.
“You give common law reasonable notice of termination unless the employment agreement permits some lesser amount to be provided,” she says. “The fact that a closure has occurred doesn't impact that and, if there are no valid restrictions on termination entitlements [in the employment agreement], then [the employee] receives common law reasonable notice subject to mitigation - which was the big issue in this case.”
Referral for comparable employment
A few days after the letter, the owner provided the worker with contact information for Zehr Transport, another local trucking company. The worker emailed Zehr a list of her current employment duties and attended a meeting with Zehr’s owner and the owner’s daughter on Dec. 29.
According to the worker, the job description she was given at the meeting was for a full-time dispatcher with on-call hours in evenings and sometimes weekends. There was also no indication that Zehr would match her current salary or when the job would start. She felt the meeting was “exploratory in nature,” so she said she needed to think about it as she hadn’t planned on considering a full-time dispatch position.
However, according to Zehr’s principals, it wasn’t an exploratory meeting and they verbally offered the worker a dispatcher position that included administrative and other duties, and confirmed her hours and wages. The company did not require an overnight dispatcher.
On Dec. 30, the worker texted Zehrs to say that she wasn’t interested in a full-time dispatch position and if there was an accounts receivable position, she would be interested. Both the owner and his daughter were surprised as they thought the interview went well.
Kinsdale’s owner also gave the worker information about another transport company, but there were no job vacancies at the time. Following her termination, the worker took an online course in bookkeeping and found a new job in July 2021. She continued her job search and found a full-time position on Dec. 13.
Dispute over mitigation
The worker sued for wrongful termination seeking damages for 22 months’ reasonable notice. Kinsdale argued that the worker failed to mitigate her damages by accepting comparable employment with Zehrs.
The Ontario Superior Court of Justice noted that a terminated employee has an obligation to mitigate their damages by seeking comparable employment in terms of status, hours, and compensation. The onus was on the employer to prove that the employee didn’t take reasonable steps to find comparable employment in a wrongful dismissal action.
The court found that the worker tried to distance herself from her dispatcher role but the reality was that she performed more than just “some” dispatch duties. The owner’s evidence indicated that, from 2015, dispatch duties took priority over the worker’s administrative duties and the documentation around the worker’s pay increase confirmed her role as dispatch. The worker’s own evidence was that half of her working hours were dedicated to dispatch, said the court.
The court also found that Kinsdale was proactive in assisting the worker in finding new employment and the evidence supported that the meeting with Zehrs involved a job offer for comparable employment. The worker’s communications indicating that she needed to think about it and didn’t want a dispatch position supported the argument that she was offered a job, the court said.
The court noted that the worker was under no obligation to prioritize Kinsdale’s interests in reducing damages for reasonable notice over her own long-term career interests, but the worker was obligated to accept comparable employment to mitigate her losses from termination. The position offered by Zehrs was comparable employment that could have started almost immediately after her termination from Kinsdale, the court said.
Obligation to mitigate
“The employee doesn’t have to prioritize the employer’s desire to avoid wrongful dismissal entitlements over their own, but they have to offset their own losses by accepting reasonable comparable employment,” says Loewenberg. “It's not about doing the employer a favour, it's about living up to legal obligations, which in any contractual dispute is to try to mitigate or offset avoidable losses.”
Although Kinsdale wasn’t legally obligated to help find new employment for the worker, it helped its situation by doing so, according to Loewenberg.
“[Kinsdale] genuinely created a situation whereby the employee had an opportunity to mitigate, and the law recognizes that an employee has to take comparable employment where it exists,” she says. “So by helping the employee find new work, it did a nice thing because it was taking care of the worker, but it also did a nice thing for itself because income earned in new employment during the notice period would offset those damages - and if the employee doesn't accept the offer, their damages may be reduced because they didn't take steps to mitigate their losses.”
The court also found that, although the worker may have been interested in taking courses and pursuing other opportunities, it wasn’t up to Kinsdale to “fund her educational pursuits.”
The court determined that the worker rejected an offer of comparable employment and failed to mitigate her damages. As a result, she was not entitled to reasonable notice damages, said the court in dismissing the worker’s suit.
“The court said that comparable employment doesn’t mean identical employment – that’s not new law, it reinforces what we know, which is the employee has an obligation to seek out or to accept new work that comes its way now,” says Loewenberg, noting that recent case law has made it a more difficult for employers to prove that comparable employment exists.
“If an employee makes an effort to look for new work and doesn't find it, most recent decisions say that’s satisfactory, and if the employer wants to disagree that the employee made appropriate effort it has to prove it, and that's a very difficult thing to prove,” she says.
Letting employees know about opportunities and setting an employee up with an outplacement are good ways for an employer to facilitate new employment for a terminated employee, even if it’s not legally obligated to do so, says Loewenberg.
“Helping the employee find or secure new work enhances the employer’s ability to argue that [the employee] didn't do enough to find work - for example, by not giving a letter of reference, an employer will have a more difficult time asserting the employee didn't do enough [to mitigate].”
