25 Sep 2016
September 25, 2016

MITIGATION AIN’T WHAT IT USED TO BE

It’s getting increasingly tougher to give a clear statement to clients about their legal rights and obligations.  Take for example the issue of termination for cause for dishonest conduct.  Up until 2001, BC counsel would generally advise their clients that dishonesty would always constitute cause for termination based on a leading Court of Appeal decision.  The Supreme Court of Canada overruled that case and found that dishonesty will not always constitute cause—the court must apply a “contextual approach” to determine if dishonesty in any particular case constitutes cause.

Up until this year, I would advise employer clients that in order to successfully argue a damage claim should be reduced because of mitigation, we would have to prove not only that the employee failed to take reasonable steps to find alternate employment but also that if reasonable steps had been taken, the employee would in fact have found such alternate employment.  The onus on the employer to prove these two branches of the test was a very heavy one.  Furthermore courts generally did not allow evidence of job opportunities in newspapers to prove a failure to mitigate.

The law appears to have changed in the decision of Logan v Numbers Cabaret Ltd (Hamburger Mary’s) 2016 BCSC 1473.

The two employees were long service employees who were temporarily laid off while renovations were being done.  That constituted a dismissal.  They were awarded 14 months’ notice.

The court however reduced their damage award significantly because the employees took no or at best minimal steps to find alternate employment.  What is remarkable about the case is that the court held that the employer did not have to prove that if they had used reasonable efforts they would have found alternate employment.  The court stated:

[35]     In these circumstances, I find that the plaintiffs have failed to discharge their duty to seek out alternate employment. They have not acted reasonably. Instead of continually and assiduously applying themselves to find employment, Mr. Logan and Ms. Bocking chose to reflect on their options, which included moving out of the province or pursuing education. I find that their efforts to look for work began only recently, in the spring of this year, and even so, those efforts have been so minimal that they cannot be said to meet their duty.

[36]         The plaintiffs argue that the onus rests squarely on Cabaret to demonstrate that had they been diligent in looking for work that they would have found suitable alternate employment. Otherwise, they submit that there can be no basis to reduce their award. They submit that the onus resting on Cabaret is a heavy one, and that Cabaret’s attempts to discharge it by attaching articles from a local newspaper reporting on the plethora of jobs for cooks and waitresses in Vancouver is inadmissible, and in any event, insufficient to discharge its onus. Therefore, the plaintiffs submit that Cabaret has failed to prove a failure to mitigate defence such that their entitlement to an award of 14 months cannot be reduced.

[37]         I agree with the plaintiffs’ characterization of the onus resting on Cabaret to prove a failure to mitigate defence is a “heavy one”: see, e.g., Smith at para. 32; Peterson v. Labatt Breweries of British Columbia (1996), 25 C.C.E.L. (2d) 241 (B.C.S.C.) at para. 10. Before consideration of that onus is engaged, however, the plaintiffs must nevertheless demonstrate that they have discharged their onus to look for work.

[38]         I find that Mr. Logan and Ms. Bocking deliberately chose not to discharge their duty to find suitable employment through constant and assiduous application to act in their own interest to maintain their income. They cannot now say to Cabaret that it must pay the full amount of the notice period. Their attempts do not constitute a bona fide effort to obtain alternate employment.

[39]         This is not a situation where the plaintiffs needed additional time beyond the fall of 2015 to recover from what Mr. Justice Burnyeat described in Smith at para. 35 as “the shock of having their employment terminated.” They appreciated by the summer of 2015 that they would not be returning to work any time soon. To the extent they needed time to recover from any shock or upset arising from their longstanding affiliation with the restaurant, it should not have extended beyond the commencement of this action on October 7, 2015. The plaintiffs do not have any reasonable excuse for delaying beyond that date to look for alternate employment: Stuart v. Navigata Communications Ltd., 2007 BCSC 463 at paras. 43, 52.

[40]         I disagree that the plaintiffs’ failure to discharge their duty is of no consequence unless and until Cabaret proves that suitable employment was to be found. As I read them, the cases cited by the parties that speak of the obligation of the employer to prove that employment was available in the context of the duty to mitigate defence involve circumstances where the discharged employee is being criticized by the employer in respect of his or her efforts to find work or rejecting offers of employment. In other words, the onus is on the former employer to prove that had the employee done more, they would have been successful in obtaining employment (see, e.g. Szczypiorkowski v. Coast Capital Savings Credit Union, 2011 BCSC 1376 at paras. 90-91). In this case, the plaintiffs did nothing other than take a recent and cursory look for job opportunities. Cabaret has proven that if the plaintiffs had read the local newspaper, which they say they did to track the progress of renovations at the restaurant, they would have seen reports of an abundance of immediate job opportunities for cooks and waitresses in the lower mainland. That they continued to receive EI benefits beyond the date this action was commenced while at the same time representing to EI that they were actively looking for work speaks poorly of their credibility.

[41]         My approach is consistent with the analysis taken by Mr. Justice Wilson in Horn v. Ikon Office Solutions, Inc., 2002 BCSC 1658. In that case, Ikon, the former employer, pointed to evidence that the former employee “stood idly or unreasonably by” and did not take reasonable steps to avoid the “unreasonable accumulation of damages suffered as a result of the termination”. Wilson J. found the case to be “borderline”; he did not see the plaintiff in that case as acting unreasonably in seeking self-employment as an option. At the same time, Wilson J. rejected the employee’s submission that the employer Ikon must produce evidence to prove there was a job available that he “would most probably have obtained”: paras. 24 and 30.

The court went on to note that on the evidence the employer had provided some evidence of the abundance of employment opportunities for cooks and waitresses.  The court allowed evidence from newspapers and Statistics Canada to prove alternate positions were available.

The court reduced the damage claim from 14 months to 7 months due to the failure to mitigate.

Mike

 

Michael Weiler practices employment and labour law including human rights and prevention of workplace harassment/bullying and independent investigations; advising on the practical and legal issues affecting private family-owned businesses; and more – see his website at www.WeilerLaw.ca .   Michael is a frequent seminar presenter and the assistant editor of Canadian Cases on Employment Law.  Michael can be contacted at mweiler@weilerlaw.ca  . For those who wish to receive articles, seminar notices and blog comments please contact Carolyn Weiler at cweiler@weilerlaw.ca  or call her at 604 336 7427.

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