The Superior Court of Justice for Ontario considered a long-term employee’s reasonable notice period and mitigation efforts in Wall v M.H. Rowe Sheet Metal Fabricating Inc. (no citation yet). This decision highlights the risks in dismissing long-term employees not subject to a written employment agreement, and the difficulty employers face in establishing that a dismissed employee failed to mitigate their damages.
Facts
In Wall, the plaintiff was an employee with 35 years of service. At the time of her dismissal, she held the position of Office Administrator and was 56 years old. She had no prior employment history or formal training. Her duties included basic administrative and bookkeeping tasks, all of which she learned on the job. The plaintiff was dismissed without cause in October 2020.
Analysis
The key issues to determine were: 1) what the appropriate notice period was; and 2) whether the plaintiff failed to properly mitigate her damages.
The Reasonable Notice Period
The Court found that the reasonable notice period was 24 months. That is not particularly surprising since 24 months is the maximum in the absence of unusual circumstances, although this case is similar to others that have exceeded 24 months in circumstances where an older, extremely long-serving employee had spent their entire career with one employer. While the Court did not cite any one factor as exceptional, it gave considerable weight to the fact that the notice period fell during the height of pandemic lockdowns, presenting an especially adverse economic situation.
Additionally, the Court rejected the employer’s argument that the plaintiff had a wide range of generic skills, making her marketable despite having only ever worked for them. In the Court’s view, the plaintiff’s employment background made her less marketable, affirming case law holding that when an employee’s skills become tailored to one specific employer then these become less transferable and less marketable. As such, the Court found that there were very few comparable positions for which the plaintiff was qualified, which lengthened her reasonable notice period.
Mitigation
The Court found that the plaintiff did not fail to make reasonable efforts to mitigate. Employers have the burden to establish failure to mitigate by demonstrating that 1) the employee failed to take reasonable steps to mitigate their damages, and 2) that had the employee taken reasonable steps, they would have secured comparable employment.
In this case, the Court found that the employer did not establish either, but focused on the second step. In that regard, the Court noted that even if the plaintiff could have done more to mitigate, she would not have secured comparable employment. This is despite the fact that the employer sent over 5000 job postings, and offered outplacement services and $1,400.00 in job counseling, which the plaintiff declined. While it can be quite strategic to provide a dismissed employee with job opportunities and question a failure to pursue them, those must be legitimate and appropriate opportunities. Upon reviewing the postings, the Court found that the vast majority of them were for positions unsuited to the plaintiff.
Regarding the plaintiff declining outplacement assistance, the Court found that it was not unreasonable for her to decline because she would have had to sign a temporary work agreement to use the agency’s services. Similarly, the Court found that declining the $1,400.00 for counseling was not unreasonable because the employer did not list any specific providers, and the plaintiff did not know where to find counseling services. Although declining these offers of assistance could be seen as unreasonable under different circumstances, the Court took notice of the pandemic as a significant economic factor, and accepted the plaintiff’s explanations without scrutinizing her apparent lack of initiative.
Finally, the Court did not fault the plaintiff for not looking for work until four months after her dismissal. On this point, the Court accepted the plaintiff’s submissions that she was in shock, and that she was unable to look for work because her municipality was a covid hot-spot at the time.
Key takeaways
This decision underscores how difficult it can be for employers to show that an employee failed to mitigate. This difficulty is particularly important in the case of long-term employees, who can be entitled to substantial compensation. Delivering hundreds or thousands of job postings is not helpful when most are not appropriate. However, offering reasonable assistance to a dismissed employee by providing strong references and outplacement counseling can help them to find new work quicker and reduce severance costs.
Notably, in a similar decision dealing with an extremely long-serving employee (Milwid v IBM Canada Inc., 2023 ONCA 702), the Court expressly stated that the pandemic was an exceptional factor that contributed to a reasonable notice period greater than 24 months. In Wall, the Court treats the pandemic as exceptional without expressly stating so, which explains its openness to accepting the plaintiff’s rejection of the employer’s offers of assistance, without pushing back on the reasonableness of her rejecting these offers.
Though it would be interesting to see if the Court would have been as sympathetic to the plaintiff in this case if the pandemic were not a factor, the substance of the decision would likely not change. We are in an era where courts are very pro-employee, and will highly scrutinize employers’ actions. Courts have also demonstrated that they will consider all relevant factors when assessing notice and mitigation. Merely offering a dismissed employee some assistance, and forwarding them generic job postings will likely not help employers establish a failure to mitigate and reduce the notice period.
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