by Keri Bennett
Where an employee has been dismissed from a job without sufficient notice, he or she may look to his or her former employer for compensation for any losses suffered. However, the employee has a corresponding duty to try to limit any such losses by looking for comparable employment. A failure to act reasonably in this regard could have a significant impact on any claim the employee might have against the employer.
Not surprisingly given the state of the economy and the unemployment rate, dismissed employees often claim that there are no comparable jobs available and hence the reason they have not managed to secure other employment within the notice period. In Munoz v. Sierra Systems Group Inc., 2016 BCCA 140, the Court of Appeal for British Columbia ruled that where this argument is advanced, it is up to the employee to prove it.
Mr. C was employed by Sierra Systems Group as an IT consultant. A few months after he started, the company rolled out a new compensation plan, which provided employees with a menu of options in terms of how they would be paid. In particular, there were four different compensation models to choose from. For his part, Mr. C chose a plan that compensated him by paying a fixed amount for each hour billed to the client. Time worked but not billed to the client – referred to as “bench time” – was unpaid.
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.
Mr. C was given advance 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 for British Columbia 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 that model. This choice of compensation model also impacted the calculation of damages.
With regards to mitigation, Sierra presented evidence at trial to establish that Mr. C. had failed to mitigate his damages because there were a number of jobs available to him following the termination of his employment and throughout the notice period. Sierra relied on job postings from April 2014, some 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 he was terminated, Mr. C had focused on building his own private company instead of looking for work. He argued there was a lack of available work that would allow him to mitigate his damages otherwise.
The Court of Appeal 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 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 any evidence in support of this position. The notice period for which he could claim damages was accordingly reduced by two months.
In wrongful dismissal cases, employers will still be required to provide evidence that an employee has failed to mitigate his or her damages. However, where an employee claims that there are no available jobs as an explanation for why he or she did not actively seek out other employment opportunities, but fails to provide any evidence to support that claim, the employer may be able to persuade the court to reduce the damages that would otherwise be awarded.