As we have written before, once a person’s employment is terminated, that person has a legal obligation to look for alternative employment. We often receive calls from recently-terminated long service employees who ask us whether they can go back to school to retrain so that they can compete with younger members of the workforce. A recent decision from the Ontario Superior Court of Justice shows why recently-terminated employees should proceed with caution when deciding whether to return to school.
Benjamin v Cascades Canada ULC
Mr. Benjamin had been employed by Cascades Canada ULC (“Cascades”) as a line operator for 28 years before his employment was terminated without notice of termination. Mr. Benjamin was provided with termination pay and severance pay slightly above his minimum entitlements under the Employment Standards Act.
Mr. Benjamin sued his employer for pay in lieu of 24 months’ notice of termination, less the amounts he already received. Cascades submitted that Mr. Benjamin failed in his obligation to mitigate his losses upon his termination when he decided to retrain by attending a full-time welding program for 6 months rather than applying for three positions available at Cascades, which were similar to Mr. Benjamin’s work and remuneration. A human resources representative at Cascades testified that Mr. Benjamin was both qualified and likely to secure all three of the positions.
Mr. Benjamin argued that his decision to retrain was reasonable because he needed to improve his skills after 28 years, and that attending the program would maximize the chance of finding a job at his former income.
The judge disagreed and described the test on the ‘duty to mitigate’ in wrongful dismissal cases as follows: an employer must establish that
(a) the employee did not take reasonable steps to seek comparable employment, and
(b) if the employee had done so, the employee could have procured such comparable employment.
If the employer is able to establish these facts, the employee has failed to mitigate, which can have the effect of reducing or eliminating an employee’s entitlement to notice.
The judge found that although an employee’s decision to seek retraining is not, by default, sufficient to prove that the employee failed to reasonably mitigate, in these circumstances, to allow a dismissed employee to ignore comparable employment in favour of retraining would have the effect of giving that employee a “free pass” to change careers at their previous employer’s expense.
Dismissed employees are expected to be reasonable in their search for alternate employment. Whether returning to school is reasonable depends on the person’s circumstances at the time of termination, the industry they work in, the timing of their decision to return to school and their efforts at obtaining alternative employment both before and during their retraining. When deciding what to do after a termination, it is important to consult an employment lawyer to learn about your duty to mitigate.
The courts recently confirmed that layoffs remain a constructive dismissal even in the context of the Covid-19 pandemic.
Despite the many areas that limit unionized employees’ rights, these employees are able to bring human rights claims.
Terminated employees who worked for federal employers may be entitled to more termination pay.