Back To School — Does Retraining Count As Reasonable Mitigation Of Damages?

August 2018

Previously printed in the LexisNexis Labour Notes Newsletter.

In Benjamin v. Cascades Canada ULC, 2017 ONSC 2583, the plaintiff had worked as an unskilled labourer with the defendant company for 28 years.  The company had eliminated all of its production functions at one of its plant locations, resulting in the dismissal of 41 employees, including the plaintiff.

There was no dispute that the plaintiff was entitled to reasonable notice of termination.  The focus at trial, however, was on whether the plaintiff had appropriately mitigated his loss.  Following the closure of its plant, the company notified the plaintiff of three comparable jobs available in another location and offered one-on-one coaching.

The plaintiff did not apply to any of those jobs and did not participate in any coaching session.  In fact, the plaintiff did not make any attempt at all to obtain alternate employment.  Instead, one month after his dismissal, the plaintiff chose to attend a full-time welding program for six months.  The plaintiff argued that he “needed to improve [his] skills after 28 years” and “brush up from unskilled labour to skilled labour” since he was “at the bottom of the food chain” (at para. 5).  The company provided evidence that the plaintiff likely would have been hired for at least two of the three available positions.

The Court held that the plaintiff failed to reasonably mitigate his damages in this case by pursuing retraining rather than re-employment.  While noting that the seeking of retraining, on its own, is not sufficient to demonstrate that an employee has failed to reasonably mitigate, the Court went on to state the following:

If the employer can establish that the dismissed employee (i) chose to retrain instead of seeking comparable positions, and (ii) could have procured that comparable employment, a dismissed employee ought not to have a “free pass” to change careers to enhance job security or obtain better hours, and then collect damages for notice simply because of dismissal.  In those circumstances, an employer should not be required to fund retraining (through payment of reasonable notice) when the employee could have obtained comparable employment.

(At para. 120.)

The Court held that comparable employment was available, and that the defendant company had met its onus and demonstrated the plaintiff could have obtained a position if he had taken reasonable steps to seek employment (at para. 149).  The Court rejected the plaintiff’s argument that the period of retraining was a “gap” in the reasonable notice period; instead, it held that entitlement to damages for wrongful dismissal ends on the date the plaintiff fails to seek comparable employment, and that the employee has no recoverable damages from that point onward (at paras. 154 to 156).

This case is a useful tool for employers as it clearly sets out that an employee seeking damages for wrongful dismissal cannot simply fail to take any steps to obtain re-employment in order to focus on retraining for an alternate career.  There may well be repercussions for his or her damages claim.