We all know dismissals can be a minefield. Among other things, there is often dispute over how much notice or “severance” the dismissed employee is entitled to. If that can’t be resolved, litigation can result.

When this happens, the employer has a potent weapon in its arsenal that many overlook – either offering a job, or finding a job offer for the employee. Gannon v Kinsdale Carriers, demonstrates the impact on litigation that the use of a post-dismissal job offer can have. 

The duty to mitigate

The notion of severance is to tide a dismissed worker over until they find new work – not a windfall. So what better way to limit the employee’s entitlement than to ensure they find a new job quickly?

If a dismissed employee challenges the amount of severance offered, they have a duty to mitigate by making reasonable efforts to find comparable employment.

In litigation, the employer may assert that the employee failed to satisfy their duty to mitigate. As we have previously written, in that case, the Court will scrutinize the employee’s job search to determine if the employee acted reasonably. If the Court finds that the employee did not discharge the duty to mitigate, the Court can reduce the employee’s entitlement to reasonable notice.

In a wrongful dismissal action, the employer can make strategic use of the employee’s duty to mitigate. This can involve sending job advertisements for comparable positions to the employee, and then questioning any failure to pursue them. The employee’s evidence on discovery may show a failure to mitigate – which the employer can rely on in court.

That strategy depends on satisfying a court that the employee would have obtained a job if they had applied, which can be hard to do. An even better strategy can be to offer the employee their job or a similar one for the notice period. In that case, there is no question that they would have obtained the job. In Gannon the employer did something very similar – it found the employee a job at another company.

The facts

In Gannon, the employee had been with the employer for twenty two years. Initially in an office personnel/accounts receivable role, in 2015 the employer moved the employee into an accounts receivable/dispatcher/office clerk role. The employer gave the employee a raise and increased her weekly hours, along with a note indicating that this was in recognition of the new dispatch duties.

On December 16, 2020, the employer circulated a letter to its staff indicating that it was permanently closing on December 31, 2020. The employer’s owner contacted several similar companies in an attempt to locate jobs for her staff. One of these companies, Zehr Transport Limited, contacted the employee regarding a role. After an interview, Zehr offered the employee a job with the same duties, at the same rate of pay, and same hours of work.

The employee rejected the offer, advising her former employer that she wanted to work in accounts receivable or payable, not dispatch. The employee returned to school for bookkeeping, and took a job in December 2021. The employee sued for wrongful dismissal.

At trial, the Court reviewed Zehr’s job offer and determined it was comparable employment, that the employee could have commenced in early January 2021. The employee rejecting this role was a failure to mitigate, and she was not entitled to damages as a result.

Takeaways

In litigation, every aspect of the process needs to be approached so as to be the most effective. As the holding in Gannon demonstrates, addressing the dismissed employee’s mitigation obligation is no exception.

Through the strategic use of a job offer, the employer in Gannon negated its obligation to provide the dismissed employee with notice beyond the statutory minimums. Further, because the employer was successful at trial, it will be compensated for a portion of its legal costs. Not only will the employee walk away with nothing, they will owe their former employer at least part of its legal expenses. All because the employer did the opposite of what it was on trial for – it found the dismissed employee a job.