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Posts tagged: Duty to Mitigate

Do I Have to Accept a Job Offer from the Purchaser of my Employer’s Business?

By , September 20, 2018 8:50 am

Ontario courts have mentioned time and time again that a terminated employee has a duty look for and accept comparable employment.

What happens when your employer is sold and the purchaser offers you employment?

A recent decision from the Ontario Superior Court of Justice provides some direction on when such an offer of employment can be rejected.

Dussault v. Imperial Oil Limited, 2018 ONSC 1168 

Mr. Dussault and Ms. Pugliese both worked in management positions for Imperial Oil Ltd. (“Imperial”). At the time of termination, Mr. Dussault had been employed for 39 years and Ms. Pugliese for 36 years.

In 2016, Imperial held a meeting where it shared plans to sell its retail business in Ontario to Mac’s Convenience Stores Inc. (“Mac’s”) and that many of its current employees would be offered jobs with Mac’s.

Both Mr. Dussault and Ms. Pugliese were offered positions with Mac’s. These offers were conditional upon both employees signing releases in favour of Imperial. The new offer stated that Mr. Dussault’s and Ms. Pugliese’s respective base salaries would remain the same for 18 months but their salary after this time was not revealed. Further, there was an explicit term where Mac’s would not recognize the decades of experience with Imperial.

If these offers of employment were accepted, Mr. Dussault and Ms. Pugliese would receive a lump-sum payment to make up for the reduction in value of their benefit plans. Imperial stated that the amount of this lump-sum payment would only be disclosed after they resigned from Imperial, accepted Mac’s job offer, and signed a release in favour of Imperial.

Both employees rejected Mac’s offer of employment as their terms of employment with Mac’s would be less favourable. Mr. Dussault was 63 years old and Ms. Pugliese was 57 years old when Imperial terminated their employment in 2016.

Decision

Justice Favreau concluded that Mr. Dussault and Ms. Pugliese did not have an obligation to accept employment from Mac’s to mitigate their damages. In coming to this conclusion, Justice Favreau first focused on the fact that Mac’s offer of employment was presented before employment with Imperial was terminated. Next, he decided it was not reasonable for the employees to accept Mac’s offers as Imperial imposed a requirement that a release be signed in order for the employees to receive their lump-sum payment. Justice Favreau viewed the requirement for the employees to surrender their right to sue Imperial as fatal.

Justice Favreau also found the requirement for the employees to accept an offer of employment that did not recognize their years of service with Imperial to be unreasonable. Finally, he found sufficient differences in Mac’s offer of employment that it was reasonable for the employees to reject the offer. Notably, there were issues surrounding a reduction in both benefits and salary.

In addition, Justice Favreau found that both employees were entitled to a whopping 26 months’ notice based on the exceptional circumstances of their respective cases.

Takeaways for Employees

  1. A terminated employee’s duty to mitigate does not require the person to accept employment with a purchaser of the business where that offer would significantly and negatively affect them going forward
  2. A requirement for employees to accept an offer of employment that fails to recognize their years of service with the former employer is likely unreasonable
  3. The timing of when the new employer offers a job is relevant; it is unreasonable to expect employees to start looking for alternative employment before they have had the chance to consider the new offer of employment

If you are being offered a new job in the context of a sale of your employer’s business, it is important to contact an employment lawyer to understand your duties and rights.

If you have questions or would like more information, you can contact an employment lawyer at MacLeod Law Firm. You can reach us at [email protected] or 647-204-8107.

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

The Duty to Mitigate: What Happens to Earnings from a Lower Paying Job?

By , July 20, 2018 10:41 am

Losing your job is one of life’s awfully stressful events. Yet, Canadian courts have long recognized the duty of a dismissed employee to seek new employment to mitigate their losses.

The duty to mitigate requires wrongfully dismissed employees to take reasonable steps to minimize the losses they have suffered. Although not usually a burdensome standard to meet, a dismissed employee should be making reasonable efforts to find new employment.

Employees Have a Duty to Mitigate Their Losses

Where an employee finds another position, courts will normally subtract the amount of money earned from such other sources from the reasonable notice period the employee is entitled to from their wrongful dismissal.

There are different ways that employees can mitigate their damages from a wrongful or constructive dismissal. An employee can accept:

  1. Re-employment with the same employer,
  2. employment in a non-comparable job position, or
  3. employment in a comparable job position

Accepting or refusing to accept a position with the employer against who the employee has a legal claim is tricky from a legal perspective. Several judges have concluded that an employee can refuse an offer of alternative employment with the same employer where the work environment the employee would be returning to is hostile or would cause loss of dignity or embarrassment. Courts look at the entire context including the employee’s relationships with individuals at the former workplace, salary, and similar work conditions and responsibilities.

Employees who mitigate their damages by finding a new job position may find a job position that has a similar level of responsibilities and salary, or may only be able to find an inferior position. A recent Ontario case demonstrates when courts will refuse to deduct the earnings of a wrongfully dismissed employee during the reasonable notice period.

The Mackenzie Decision

In MacKenzie v. 1785863 Ontario Ltd., 2018 ONSC 3442, Mr. MacKenzie was terminated from his senior level position as a general manager at a printing company where he earned $65,000 annually. Mr. MacKenzie was 65 years old at the time of termination and had been working for the employer for about five years. The employer blamed Mr. MacKenzie for being unable to revive the business and terminated him without cause.

Within one month, Mr. MacKenzie began working as a consultant to his wife’s printing company, earning $2000 per month. After six months, he began working at a new position, earning $1500 per month, which is about 3.6 times less than the annual salary he was earning at the printing company.

After deciding that the appropriate length of notice for Mr. MacKenzie is nine months (equivalent to nearly $49,000), the court decided that the income Mr. MacKenzie earned after termination should not be deducted from the nine months’ notice period.

The Test: When is Income Deducted from Notice Pay?

In concluding that Mr. MacKenzie’s earnings were not to be deducted, the court cited Brake v PJ-M2R Restaurant Inc., 2017 ONCA 402.

In Brake, the court stated that a dismissed employee has a duty to make reasonable efforts to find a position comparable in salary to mitigate his or her damages. However, the employee can refuse employment that is not comparable in salary without breaching the duty to mitigate.

The court’s view is that where a wrongfully dismissed employee is forced to accept a position that is considerably inferior, the earnings from such a position are not classified as mitigation of damages. Accordingly, such earnings are not deducted from the amount the employee is entitled to from the former employer.

This decision is significant for employees because it recognizes that dismissed employees sometimes need to work at relatively menial jobs to pay the bills while they look for a comparable job.

If you have been recently terminated and are considering taking a lower paying job or a contract position, contact one of the lawyers at MacLeod Law Firm to learn how this job will impact your wrongful dismissal. You can contact us at [email protected] or 647-204-8107.

Do You Have An Obligation To Look For A New Job After Being Fired?

By , April 5, 2016 10:00 am

The Basics

A wrongful dismissal occurs when an employer does not provide you with enough notice of termination. Most employers do not provide any notice of termination.

In a wrongful dismissal action, you can claim damages against your former employer equal to the value of the pay and benefits you would have earned during the applicable notice period.

During this notice period, you have a legal obligation to take reasonable steps to look for a new job. This is called your “duty to mitigate”.

In addition to looking for a new job it is important to keep a record of your job search efforts, particularly if you are planning to sue your employer for wrongful dismissal. You should update your resume (if it has been a long time since you last had to search for a job, consider attending a seminar on resume writing, or consulting with a career counselor). Once you begin searching for work, you should keep a job search journal in which you record all the applications you made, the responses you received, any follow-up actions you took and all the things you did when looking for a new job (such as visiting a career counselor or attending a seminar on resume writing). You should also keep a copy of all the applications you made. It is important to keep a record as you will have to show a judge that you tried to find a new job. Otherwise, a judge may refuse to order any damages because you failed to mitigate your damages.

A Cautionary Tale

In Plotogea v Heartland Appliances Inc., the judge concluded Mr. Plotogea had been wrongfully dismissed and that he was entitled to nine months’ notice of termination. However, the judge noted that Mr. Plotogea’s efforts to find alternate employment were inadequate and only ordered the employer to pay him two months’ damages.

In coming to this conclusion, the judge noted Mr. Plotogea submitted a list of 125 companies which he stated he visited. However, he did not provide any details for his visits, such as dates or the names of people with whom he spoke at these companies. He stated that he simply dropped his resume off at the front counter, and he did not follow up with any of these companies. He claimed he was not provided with an application form to fill out at any of these companies, and that he was unable to find any advertised positions on his own. The judge commented that even if he did attend at all these businesses and dropped off his resume, he was not surprised that there was little response from the companies as his CV was amateurish.

Conclusion

This case illustrates why it is important to keep a record of everything you do in connection with finding a new job after your termination. If you have been recently terminated, you should consult a lawyer to make sure you abide by any other obligations you may have after your dismissal.

If you have any questions about your legal rights in the workplace, one of our lawyers would be happy to meet with you. Please call 647-204-8107 or email [email protected].

“The material and information provided on this blog and this website are for general information only and should not, in any respect, be relied on as legal advice or opinion. The authors make no claims, promises or guarantees about the accuracy, completeness, or adequacy of any information linked or referred to or contained herein. No person should act or refrain from acting in reliance on any information found on this website or blog, without first retaining counsel and obtaining appropriate professional advice from a lawyer duly licensed to practice law in the relevant jurisdiction. These materials do not constitute legal advice and do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.”

Fired: Now should You Look for a New Job?

By , December 21, 2015 10:00 am

The Duty to Mitigate

Terminated employees who sue their former employers for wrongful dismissal have a duty to look for a new comparable position.  This is called the duty to mitigate.  If an employee is offered comparable employment, he must accept it. Then, any income earned in that position is deducted from what the former employer owes the employee as damages.

Employees often ask us what this duty to mitigate involves.  The Ontario Court of Appeal recently issued a decision, Carter v. 1657593 Ontario Inc. (The Olde Angel Inn), dealing with what this obligation on employees requires.

The Case

The Court considered the case of a terminated employee, in his fifties, who had “worked for most of his adult life for one employer.” After termination, the employer did not provide Mr. Carter with a letter of reference.

Mr. Carter checked advertisements, submitted a résumé, and reached out to his contacts in the industry he had worked in at his former employer. He was offered one job that was not comparable in status, hours, or remuneration – which he declined.

The Court of Appeal considered Mr. Carter’s efforts to be sufficient.  The former employer could not point to any comparable jobs that Mr. Carter could have applied for and did not. The Court did not find that Mr. Carter ought to have accepted the one position offered to him.

Lessons for Employees

If you are terminated, and want to sue your former employer for wrongful dismissal, you have to show the court that you tried to find a new job.  However, the Carter decision suggests that older employees will not be held to a rigorous standard. Employees will also not be required to accept new positions that are not comparable in status, hours or pay.

If you have been terminated and have questions about a severance package or the duty to mitigate, please contact us at [email protected] or 647-204-8107.

 

“The material and information provided on this blog and this website are for general information only and should not, in any respect, be relied on as legal advice or opinion. The authors make no claims, promises or guarantees about the accuracy, completeness, or adequacy of any information linked or referred to or contained herein. No person should act or refrain from acting in reliance on any information found on this website or blog, without first retaining counsel and obtaining appropriate professional advice from a lawyer duly licensed to practice law in the relevant jurisdiction. These materials do not constitute legal advice and do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.”

 

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