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What is the impact of mental health issues on the duty to mitigate

It has often been said that termination from employment is the capital punishment of employment law. While perhaps too extreme an analogy, there is no doubt that termination is an emotionally draining experience. The courts have grappled with the issue of plaintiffs in a wrongful dismissal claim who argue that the emotional upheaval of their dismissal resulted in an inability to look for replacement work for a period of time.

Recent decisions in Ontario have, in fact, dealt with this issue. While the onus of proving a failure to mitigate lies on the employer, will the employer discharge that onus by pointing to the plaintiff’s failure to make efforts to mitigate following dismissal regardless of the plaintiff’s mental state? The Ontario courts have generally accepted the plaintiffs’ argument, in appropriate circumstances, that their dismissal resulted in such significant mental distress that it was reasonable for them to have taken a period of time before actively searching for work.

In the 1995 decision of Tannous v. Donahue, the plaintiff, an administrative assistant, was terminated in unpleasant circumstances. Included in those circumstances was an allegation, accepted by the court, that the employer’s representative had physical accosted the plaintiff. In finding that nine months was an appropriate period of notice, the court took into account what it called the “reactive depression” caused by the manner of the plaintiff’s termination. The court found that she was partially disabled as a result and extended the notice period accordingly. In a decision in 2007, the Ontario court considered the situation of a plaintiff with two years working experience at a car dealership. The plaintiff was dismissed without cause and claimed that she was unable to mitigate her damages by looking for new work due to the emotional distress caused by her dismissal. The court commented on earlier Court of Appeal decisions and accepted the premise that there is no prohibition against considering the plaintiff’s mental state, and in particular the mental distress arising from the dismissal, in assessing the reasonableness of the plaintiff’s mitigation efforts. However, in that case, the court found that it would have been reasonable for the plaintiff to have made some effort in spite of her mental state and reduced her notice entitlement by twenty-five percent.

While the courts have held that other health conditions are not proper considerations in determining the length of notice, they are relevant in assessing the efficacy of mitigation efforts. This health condition in question need not arise from the facts of the dismissal. For example, in one decision, the plaintiff had suffered a heart attack following his termination from employment. The impact of that heart attack on his ability to look for work was considered by the court in assessing the appropriate notice period. In another decision in 2007, the Ontario court specifically found that the employee’s delay in commencing their job search following termination was justified based on the emotional upset of that termination. The court stated “…employees require a certain post termination readjustment…” before they can start looking for work.

These decisions are consistent with the Ontario court’s general attitude towards dismissed employees and the recognition of the importance of the employment relationship to most individuals. The take away from this case law is that employers must exercise caution when dismissing any employee, and must take into account the likely impact of the dismissal on the employee’s ability to find a replacement job. In many cases, offering outplacement assistance to such employees can alleviate the employee’s emotional distress to some degree.

Earl Altman
Garfinkle, Biderman LLP

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Earl Altman

Legal consultant at EA Consulting
Earl Altman was a partner at Garfinkle, Biderman and now heads his own consulting firm. Earl has practiced commercial and employment litigation. Earl’s practice focuses on employment disputes, including acting for employees and employers in wrongful dismissal claims, and in breach of contract and breach of fiduciary duty claims. Read more
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