Notice entitlement is supposed to bridge the gap to similar work, not be retraining for a different career
By Jeffrey R. Smith
Providing reasonable notice to an employee whose employment is being terminated is one of the fundamental elements of Canadian employment law that employers must comply with.
So what is reasonable notice? This is something that sometimes can confound employers, and of course it varies depending on the dismissed employee’s situation. The employee’s length of service, age, type of job, and the job market are some of the factors that go into figuring out what the notice entitlement is.
For example, an older employee with a longer term of service in a management position is going to be entitled to more notice — or pay in lieu of notice — than a younger, short-term employee in an entry-level job. Reasonable notice is intended to bridge the gap between the end of one job and the beginning of a new one.
However, an important consideration that can affect a dismissed employee’s entitlement is mitigation of damages — is the employee making a reasonable effort to find new work during the notice period? The employee can’t just sit back and collect money in lieu of notice without trying to lessen the damage from being fired.
Often where a dismissed employee hasn’t really looked for new work after being fired but files a wrongful dismissal suit, the court will reduce or eliminate the reasonable notice damages.
One of the major factors in determining reasonable notice entitlement is the likelihood of finding similar employment. But what happens if the dismissed employee decides she wants to go into a different type of work rather than looking for a job similar to the one she was just fired from? Is that considered trying to limit the damages from being dismissed? The answer to that, apparently, is no.
Once again, reasonable notice entitlement is intended to bridge the gap between the end of one job and the next job that the worker can find. Ideally, it is similar employment, and if the worker finds a job that is lower-paying, sometimes notice damages have to offset the different for a certain period of time. However, a worker who decides to pursue training and education for a different career — well, it may be an attempt to better oneself or pursue one’s dreams, but it’s not considered mitigating the damages from loss of employment.
Ontario case highlights entitlement issues
A recent Ontario case saw a company dismiss a number of employees when it closed a plant down — including one worker that had been with the company for 28 years. The worker refused a termination package that he was offered, so the company gave him eight weeks’ pay in lieu of notice and 26 weeks’ severance pay, his minimum entitlements under employment standards legislation.
The company also provided support with outplacement job counselling, job coaching, guidance on searching for new employment, and information on other job opportunities both within the company and with other employers in the area. However, the worker decided he didn’t want to apply for any of the jobs within the industry and instead enrolled in a six-month program for a different line of work.
The workers sued for common law notice, which would be significant for a worker with 28 years of service. However, the trial judge determined the worker’s decision to enter a training program for a different type of career was a failure to take reasonable steps to mitigate his losses — the worker’s entitlement to wrongful dismissal damages ended when he decided to enrol in school, said the judge. The claim for wrongful dismissal damages was dismissed: see Benjamin and Cascades Canada ULC, 2017 CarswellOnt 6278 (Ont. S.C.).
An employee’s entitlement to reasonable notice damages doesn’t just stem from what the employer actually provided at the time of dismissal. The reasonable notice period is supposed to be the time during which an employee is given a chance to find new employment — if the employee goes into some form of training for a different type of employment, that isn’t looking for work and the employee hasn’t mitigated the damages stemming from the dismissal.
Sometimes, getting let go from one job can be inspiration for someone to change direction in her professional life and pursue a job she’s been dreaming of. This, of course, is perfectly fine and for many people is the right decision — but pay in lieu of notice from the former employer isn’t intended to fund that dream.