MOVE LOCATION OR LOSE YOUR JOB
With the advent of free trade and the globalization of economies, the trend of transferring employees from country to country and even between continents is increasing. Many people are only too happy to be transferred anywhere warmer than here, but that is not always the case. The question often arises, do you have to go? If the company says you=re moving to Ohio and you say no, have you failed to fulfill your obligation to take all reasonable steps to reduce your wage loss?
A man we will call Greg, got a job as a mechanical engineer in Cambridge, Ontario in 1966. By 1997, he was 53 years old and was a technical consultant for the company earning over $80,000.00 per year.
The employer was closing down its Cambridge facility and moving all operations to its other location in Ohio. It offered Greg a job in Ohio at a comparable salary and position but he refused.
After his termination, Greg started his own consulting business working as often as he could, but in fact on an occasional basis.
Greg and his employer could not work out a severance package and Greg ended up suing for wrongful dismissal. The employer argued at trial that Greg had failed to mitigate his damages. AMitigation@ means to lessen your damages and like the landlord whose tenant has run out on him, Greg had an obligation to attempt to lessen his damages by finding a new job. The landlord, likewise, has an obligation to lessen his damages by trying to find a new tenant. Greg=s employer argued that Greg should have had to take the job in Ohio and deserved no award of damages.
At trial, the employer also argued that Greg could have found full time work making comparable money and that his choice to start his own consulting business meant that he earned less money during the 18-month notice period after his termination than he could have. The employer thought that it shouldn't have to subsidize Greg starting up his own business.
Greg argued that the full time jobs he could have had during his 18-month notice period would have been short term contract positions that would not have given him a secure future in the long run. With respect to moving to the United States, Greg did not think that the obligation to mitigate his damages extended to changing his country of residence and leaving behind the community in which he had lived and worked for over 3 decades.
The Trial Judge and eventually, the Court of Appeal of Ontario agreed with Greg on all of these issues.
The Court of Appeal thought that given Greg=s long association with Cambridge and his age, that it was not unreasonable for him to refuse to move to Ohio. While I agree with the Court of Appeal's decision, it almost implies that if Greg was younger and had not lived in Cambridge for so long, he might have been obliged to move to the United States to mitigate his damages. The decision almost implies that moving to an entirely different country is no different than being transferred from Cambridge to Ajax. I would have felt better if the Court had made it clear that unless an employee had accepted the necessity of transfers to different countries at the time of accepting the employment in the first place, such transfer will always constitute a dismissal and that the employee would not be obliged to change their country of residence to mitigate damages.
With respect to Greg=s consulting business, the Court of Appeal found that the fact that the early years of Greg's self-employment did not earn him much money did not mean that it was an unreasonable attempt at mitigation. The Court held that an employee who has been terminated is entitled to consider his long term interests when looking for another way of earning a living. Greg had quite reasonably decided that his long term interests were best served by starting up a consulting business even though the income in the first few years would not be as much as if he just took another full time job. The Courts agreed with that decision and was not prepared to penalize Greg for having failed to look for full time positions.
While the Court of Appeal's decision in this case is principled and follows the law, there is another way of looking at this case; Greg's employer=s position was somewhat obnoxious. Greg gave over 3 decades of loyal service to them and then they terminated his employment. Instead of just paying him a reasonable severance package and walking away, they decided to try to save money by arguing that Greg should change his country of residence and grab the first job that comes along. Not a very sympathetic position to take after someone has rendered 30 years of loyal service. I imagine that the judges involved in the case had the same very human reaction to this scenario that most people would.
As published in the Hamilton Spectator, June 17, 2002