by Keri Bennett
As noted in past articles here, Canadian employees can sue for lack of adequate notice of termination. Fired employees seeking damages for inadequate notice have a corresponding duty to mitigate or minimize any resulting losses. If other work is available, their losses may be minimal. Employees frequently claim a lack of available work. But who must prove what?
In a recent decision, the British Columbia Court of Appeal ruled that where lack of work is claimed, the employee must prove it. It is not up to the employer to prove the opposite.
Mr. C was employed by Sierra Systems Group as an IT consultant. A few months after he started, the company initiated a new compensation plan. It gave employees a choice on how they would be paid. Four different compensation options were presented to employees. Mr. C chose a plan that compensated him by paying a fixed amount for each hour billed to the client. Time the employee did not bill to a client was unpaid and was referred to as “bench time.”
Mr. C billed and was paid for a significant number of hours in the first part of 2013. But later in the year, there was no available work, so no pay. He was given notice of termination on October 24, 2013, with his employment ending effective December 5, 2013.
The trial judge found that the date the employee was effectively “on the bench” constituted the actual termination date of his employment. Specifically, the trial judge found that by placing Mr. C “on the bench” the company had initiated a temporary layoff under the British Columbia Employment Standards Act. She also found as fact that other job opportunities for Mr. C during the reasonable notice period were “scarce.” She awarded Mr. C damages for lost pay from that date, for the full period of reasonable notice.
Court of appeal
The court of appeal overturned the trial court on the “bench time” issue. It ruled that being placed “on the bench” did not constitute a temporary layoff. Rather, Mr. C had chosen a specific compensation model and was paid in accordance with it. This choice of compensation model also impacted the calculation of damages.
Sierra led evidence at trial that there were many jobs available to Mr. C outside the company. It relied on job postings in April 2014, about six months after Mr. C was told he was being terminated. Sierra also argued that IT skills are readily transferable and that the court should take judicial notice of that fact.
After his termination, Mr. C had focused on building his own private company, rather than seeking a new position. He argued there was a lack of available work that would allow him to mitigate his damages otherwise.
The appeal court found that just because there may have been a lack of work within the company for this specific employee, that did not support his argument that there was a lack of work in the IT sector generally.
The appeal court ruled that it is up to the employee to prove that there is a lack of available work. In this case, Mr. C failed to provide such evidence. The notice period for which he could claim damages was accordingly reduced by two months.
In wrongful dismissal trials, employers will still be required to provide evidence that an employee has failed to mitigate his or her damages. However, where an employee claims a lack of alternate employment options as an explanation for not actively seeking other jobs—but fails to provide the evidence to prove that—the employer may be able to have the employee’s damages award reduced accordingly.