Failure to mitigate results in reduced damages award

Employee did not look for new employment

After 10 years of employment with Carter Pontiac Buick Ltd., Darius Ata’s employment as a car salesperson came to an end on Oct. 29, 1998. Mr. Ata alleged that he was wrongfully dismissed and brought an action for wrongful dismissal against his former employer. Carter alleged that Mr. Ata quit his employment and was therefore not entitled to any damages.

When Mr. Ata first started working for Carter he signed a “New & Used Vehicle Salesperson Contract” which contained a provision that sales representatives were responsible to sell and deliver a minimum average of nine units per month. For the first three years of his employment, Mr. Ata met these requirements. However, starting in 1992 his sales dropped considerably. Carter believed that Mr. Ata was not selling vehicles at a level that was expected of him.

As a member of the sales staff, Mr. Ata had use of a demonstrator vehicle. There were certain restrictions on the use of demonstrator vehicles by the sales staff. For example, salespersons were responsible for all damage to the vehicle, accidents were to be reported immediately regardless of how small, and only the employees and their spouses could drive the vehicle.

On Oct. 29, 1998, in breach of policy, Mr. Ata’s son used his demonstrator vehicle and was in a motor vehicle accident with the car. After Carter learned of the accident, Mr. Ata met with Mr. Aasen, Carter’s general sales manager, later that day. As a result of this meeting, Mr. Ata’s employment with Carter was terminated. However, at issue is whether Mr. Ata tendered his resignation at this meeting or whether his employment was terminated.

In determining this issue the Court looked to the actions of the parties afterward. After his employment ended Mr. Ata applied for employment insurance benefits. On his application he indicated that his dismissal was the result of the fact that his son had had an accident with the company car and because his sales were not high enough.

On the record of employment (ROE) issued by Carter, the reason for the issuance of the ROE was given as “K-other,” a quit or dismissal. No further comments were provided. On Nov. 19, 1998, Ms. Henderson from Human Resources Development Canada spoke with Mr. Murray, Carter’s credit manager, who informed her that Mr. Ata was dismissed because his production was off. At trial Mr. Murray denied that he made that statement.

The Court also considered the testimony of both Mr. Ata and Mr. Aasen, the two people at the meeting. Mr. Aasen testified that he told Mr. Ata how unhappy he was that the car had been in an accident and that he would be taking the car away from him. Mr. Aasen further testified that they talked about Mr. Ata’s production and that Mr. Ata then advised him that he would probably not be staying much longer with Carter.

Mr. Ata testified that he never said that he quit. He testified that he was dismissed because of the incident involving the demonstrator vehicle. As for the issue of his sales, he testified that he raised that issue on the application for employment insurance benefits because he had heard from other employees at Carter that this was an issue.

In light of the conflicting evidence between Mr. Ata and Mr. Aasen the Court accepted the testimony of Mr. Ata. The Court held that Mr. Ata did not quit his employment but rather was dismissed by Carter.

Based on his age, his experience and his length of employment, the Court held that reasonable notice in this case would be nine months. However the damages awarded to Mr. Ata were reduced by three months because of Mr. Ata’s failure to properly mitigate his damages.

Mr. Ata made no applications for employment until January 1999 and he restricted his applications to GM dealerships. Carter produced evidence at trial that many other dealerships in the area hired in the nine-month period subsequent to Oct. 29, 1998, yet Mr. Ata did not secure employment during that time.

For more information:

Ata v. Carter Pontiac Buick Ltd., 2002 BCSC 531.

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