Employer obligations for helping a fired employee find new work
Question: Can an employer be legally obligated to provide services such as outplacement counselling, or be liable for not providing them to dismissed employees?
Answer: In short, the answer is yes, but not usually. The operative word in the question is “can.” In the most apparent case, an employer may be obligated to provide such services as a matter of contract. For example, an employment contract or collective agreement might provide that the employer will pay for outplacement counselling in the event of termination. In another case, a termination letter may include an offer of outplacement counselling as a term of the severance package. These are instances in which an employer can be obligated to provide outplacement counselling and be held liable for breach of the contractual promise to do so.
In the absence of an agreement, it would be unlikely for an employer to face such an obligation outright. It would be even rarer for a court, adjudicator or arbitration board to require an employer to provide outplacement counselling as a remedy. This is not to say it cannot happen. In a 2010 case, the Ontario Human Rights Tribunal ordered an employer to pay $2,500 toward outplacement counselling services to an employee found to have been terminated during her probationary period for reasons relating to her pregnancy and miscarriage.
Without question, it can be legally advantageous to provide outplacement services with a view to reducing the employer’s ultimate exposure. Easing the employee’s transition to alternative employment is one of the best ways to prevent liability for aggravated or punitive damages for harsh manner of dismissal.
The issue of outplacement counselling at the employer’s cost has informed the mitigation analyses in various cases. Where sued for wrongful dismissal, an employer who provided outplacement counselling has a stronger argument that the employee failed to mitigate its damages by failing to find replacement employment. In one Ontario case, the employee’s reasonable notice period was reduced from 17 months to 15 for failing to avail herself of the employer’s offer of outplacement counselling services.
The relevance of outplacement counselling to the mitigation analysis was explicitly recognized by Justice Gerald E. Taylor of the Ontario Superior Court of Justice in Aucoin v. Liturgical Publications of Canada Ltd.:
“No assistance was given by Liturgical Publications to Eric Aucoin to help him secure alternate employment. He did not receive a signed letter of reference until shortly before the trial. He was provided with no outplacement counselling. He was not told about the job opportunities found by Michael Morrissey on his searches of the Workopolis website. I am not suggesting that the employer has an obligation to provide outplacement counselling to a dismissed employee or bring job opportunities to the attention of the former employee, but if an employer intends to argue the failure to mitigate on the part of the former employee, it would be well advised to present evidence of assistance that was offered to the terminated employee during his or her job search.”
Many employers utilize outplacement services as a settlement tool. The Canadian Human Rights Commission website provides examples of settlement agreements between parties to federal discrimination complaints. Outplacement counselling at the employer’s cost is a commonly listed settlement term.
Of course, when terminating an employee, the employer hopes to avoid litigation altogether. For this very reason, some employers offer outplacement counselling immediately upon termination. Assisting the employee to find a new job is one of the best ways to avoid a wrongful dismissal action, employment standards claim or human rights complaint.
For more information see:
•Aucoin v. Liturgical Publications of Canada Ltd. (March 2, 2009), Doc. 08-4157-SR (Ont. S.C.J.).
