Ontario worker’s underwhelming mitigation efforts reduce period from 8 to 6 months
An Ontario worker with some managerial responsibility and more than five years of service is entitled to eight months reasonable notice, but didn’t do enough to look for new work and will get compensation for only six months, the Ontario Superior Court of Justice has ruled.
La Presse is a daily online French-language newspaper based in Montreal. It hired Merida Lake, 54, in August 2013 to be the general manager of a sales division based in Toronto and she started work one month later. Prior to joining La Presse, Lake had worked for 20 years in sales and sales operations for various media companies, including her previous position as a brand director for a multiplatform media brand. Her position with La Presse involved a more senior job title, higher salary, and higher bonus than her last job. She was the most senior employee in Toronto and reported to the vice-president of sales and operations at La Presse’s main office in Montreal, although she wasn’t involved in executive meetings or setting the organization’s overall strategy.
The Toronto division’s purpose was to generate advertising revenue in English Canada and Lake was involved in client development, training and management of sales teams, and developing sales strategies.
As part of her compensation, Lake received an annual bonus. The company’s bonus plan stated that It was to be equal to 25 per cent of her salary and was based upon “attainment of corporate objectives.” The plan also stated that she could receive up to 35 per cent of her salary if those objectives were exceeded. La Presse’s total rewards statement, which set out its annual corporate objectives, stipulated that for retirement, death, long-term disability, or involuntary, employees had to work at least six months to receive a pro-rated bonus for the year.
Over time, La Presse’s business shifted away from print to online only, creating challenges in the Toronto division. In March 2019, La Presse decided to close the Toronto office and outsource the work. On March 25, the company informed Lake that it would be terminating her employment in two months, on May 30. They started negotiating the terms under which they would part ways, but they couldn’t reach an agreement. Lake’s last day of work turned out to be April 30.
Lake she sued from wrongful dismissal and claimed damages equal to 12 months’ pay in lieu of reasonable notice, including the annual bonus she would have received during the notice period.
No momentum to job search
Lake started looking for work in early June 2019 by signing up for email notifications from a job-search website. She started using career counselling services provided by La Presse in late June, two months after she stopped working. She submitted her first job application in September and over the next year, she applied for 11 jobs, of which nine were vice-president positions that were more senior than her position with La Presse or any other company for whom she had worked. However, she claimed that the responsibilities were similar to her previous roles. She also attended conferences for networking purposes. However, she had yet to find a new job two years after her dismissal and claimed that her age contributed to her difficulty in finding employment.
A few months after closing the Toronto office, La Presse determined that the outsourced service provider wasn’t working out and reopened the Toronto office.
The court found that Lake’s role with La Presse involved a certain amount of responsibility in the Toronto office, but she wasn’t a key member of the company’s overall management team. Her service time of five and one-half years was “neither a terribly short nor terribly long period of time,” and her age of 52 at the time of dismissal may have made it harder to find work. However, she had a lot of experience in management and sales that should help her search for employment, said the court.
The court also fond that although Lake only found a handful of jobs for which to apply, she aimed her job search too high as she applied mostly for positions higher than that which she had filled previously. If she broadened her search, she likely would have found more positions available, the court said in determining Lake’s reasonable notice entitlement at eight months.
Annual bonus an ‘integral’ part of compensation
As for whether Lake was entitled to the annual bonus for her notice period, the court agreed that it was “an integral part” of her compensation package. Despite the condition tying it to corporate objectives, she received the bonus every year of her employment with La Presse and there was nothing in the employment contract or the total reward statement that clearly removed her common law right to the bonus for the reasonable notice period, the court said. La Presse argued that when the Toronto office closed, there was no opportunity for it to achieve corporate objectives, but the court countered that the office reopened later in 2019 and all employees in the Montreal office received their usual bonuses. Had she remained employed during the notice period, Lake would have received the bonus, the court said.
However, the court also found that Lake failed to properly mitigate her damages from her dismissal. It would be reasonable for her to take a month to adjust to the firing before starting to look for work, but she didn’t start looking until early June 2019, more than a month after her last day of work and two months after she was notified of her dismissal. In addition, she initially didn’t do much other than sign up for emails and attend conferences, and didn’t apply for a job until September — at that point limiting much of her job search to positions higher than she had worked before.
The court found that Lake waited too long to commence her job search, aimed to high by not applying for less senior roles, and waited too long to apply for any jobs. This warranted a two-month reduction in her reasonable notice period, said the court.
La Presse was ordered to pay Lake damages equal to six months’ salary and benefits, plus a pro-rated amount of her 2019 bonus from the start of the year to the end of her notice period and minus what she had been paid during the notice period. The total damages amounted to $97,981.87.
For more information, see:
- Lake v. La Presse (2018) Inc., 2021 OSNC 3506 (Ont. S.C.J.).
