Did you know that it is usually in an employer’s financial interest to help a recently terminated employee find alternative employment?
Here’s why: the faster a terminated employee secures alternative employment the lower the wrongful dismissal damages he or she can prove.
Helping A Recently Terminated Employee Find A New Job Can Save you Money
Here’s an example to illustrate the point: Assume a 45 year old middle manager who earns $ 52 000 a year is terminated without cause and without notice after 12 years employment and reasonable notice is 12 months. If she finds a new job after 12 months her damages are $ 52 000 whereas if she finds a job after 3 months her damages are $ 13 000. [Note: This assumes the employee has not signed an employment contract with a legally enforceable termination clause.]Not Helping a Employee Find a New Job Can Hurt Your Legal Case
An employee who is terminated has a legal obligation to mitigate her damages by seeking alternative employment. In practice, however, it is extremely difficult for an employer to prove that an employee did not meet this legal obligation. A case decided earlier this year states that a judge should consider whether an employer has tried to help a terminated employee get a new job when determining whether an employee has taken adequate steps to seek alternative employment. In this regard, Justice Taylor wrote:
“…it is significant that the (employer) offered no assistance to the (former employee) in seeking and obtaining alternate employment. Although an employer is not obligated to provide such assistance to the dismissed employee, that is an important factor to be taken into consideration when the employer then accuses of the former employee of not taking adequate steps to secure alternate employment”.
Lessons to be learned:
- If an employee is being terminated without just cause and the parties have not agreed in advance how much notice of termination he or she is entitled to receive, the employer should try to help the employee secure alternative employment.
- The employer should consider providing a truthful positive verbal and written reference to the employee. Increasingly, employers will make an offer of employment conditional on a successful reference check. Withholding a reference can therefore prevent an employee from obtaining a new job.
- For employees who have been out of the job market for many years the employer should consider providing the terminated employee with outplacement services. An outplacement counselor will, among other things, help the person prepare an updated resume, and provide the person with interviewing tips and networking opportunities. In addition, it helps the employee start looking forward as opposing to focusing on negative emotions arising out of the termination.
- The employer should consider sending the terminated employee job postings on a regular basis. These postings are available at websites like wowjobs.ca. If the employee commences a wrongful dismissal action, then at discoveries the employer can ask the employee if she applied for these vacancies. If not, the employer can argue the employee did not take adequate steps to secure new employment.
For over 25 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on employee terminations. If you have any questions, you can contact him at 416 317-9894 or at [email protected]
In the recent decision of Andros v Colliers Macaulay Nicolls Inc., the Ontario Court of Appeal (“OCA”) found yet another termination clause to be unenforceable. In this decision, the OCA reaffirmed and clarified various principles surrounding the enforceability of such clauses.
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