Mitigation: What’s in an age?

A terminated employee who is older may have a reduced duty to mitigate damages from dismissal

Following termination, an employee has a duty to reasonably attempt to mitigate her damages caused by her termination. In other words, an employee cannot simply sit back and wait to try and collect from her former employer in regards to notice. An employee must take reasonable steps to try and obtain new work, failing which the employee may experience a reduction of the notice entitlements to which she is otherwise entitled. However, does an employee’s age impact the duty to mitigate or the amount of reduction that occurs in the event she fails to fulfill such duty? This question was answered in the recent British Columbia Supreme Court decision of Dodge v. Signature Automotive Group Ltd.

After about 20 years of employment and at the age of 59, the employee, who worked as a financial services manager for the employer’s car sales business, was terminated without notice. As a result of his termination, the employee initiated legal proceedings seeking, among other things, damages for wrongful dismissal.

Given the employee’s Bardal factors, which includes — but is not limited to — the employee’s age of 60 at the time of the trial, the court established that the employee’s notice entitlement was 17 months. As part of its analysis, the court stated, “…for the particular work the (employee) was doing, I expect that the marketplace prefers 50-year-olds over 60-year-olds, and probably 45-year-olds over both. Thus, the (employee’s) age is a factor in his favour under the Bardal analysis.”

However, after reviewing the evidence provided with respect to the employee’s attempts to reasonably mitigate his damages caused by his termination, the court determined that the employee had failed in this regard. Specifically, from the date of the employee’s termination up to the time of trial — about one year — the employee had only applied for seven new employment opportunities.

“In my view, the (employee) did not do enough to find new work. It is never easy to pound the pavement and knock on doors after one has been let go from a job, particularly after many years. But it is, nonetheless, the duty of a plaintiff employee to act reasonably so as to secure new work if it is available. In my view, it was impossible for the (employee) to know what the job market held for him when he did not do enough to learn what the prospects really were. Literally knocking on doors, leaving resumes, asking to have lunch and taking other such steps are necessary, certainly in retail car sales, where word of mouth and personal links appear to count for a great deal,” said the court.

Accordingly, the court reduced the notice award the employee would have otherwise been entitled to. However, given the employee’s age at the time, the court decided the reduction in notice should be less then it otherwise would be.

“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.”

Lesson for employees

While an employee’s age may be a factor that could hinder her ability to obtain new employment, the above decision demonstrates that it does not relieve an employee’s duty to reasonably attempt to mitigate damages following termination. Rather, no matter how old an employee may be, they are still required to knock on doors, leave resumes, ask to have lunch and take other such steps that are necessary to try and obtain new employment. However, it appears the amount of a reduction to the notice period that will occur in the event an employee fails to reasonably attempt to mitigate her damages will depend on an employee’s age with a lesser reduction for more senior employees.

Lesson for employers

Despite the finding in Dodge with respect to the employee’s failure to reasonably attempt to mitigate his damages, it can be very difficult for an employer to succeed in establishing that an employee has failed to reasonably mitigate. Therefore, employers should carefully analyze the circumstances for any factor that could increase the likelihood of a reduction to an employee’s notice entitlement.

For more information see:

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

Ronald S. Minken is a senior lawyer and mediator at Minken Employment Lawyers, an employment law boutique, located in Markham, Ontario. He can be reached at Ron gratefully acknowledges Sara Kauder and Kyle Burgis for their assistance in preparation of this article.

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