Duty to mitigate regardless of career change
When people are terminated from their employment, it is often a time to pause and reflect. Those reflections sometimes lead to a desire for a new career path.
As healthy as change can sometimes be, if you have not reached a settlement with your former employer it can put your entitlement to pay in lieu of notice at risk.
Employees are entitled to reasonable notice at common law (judge made law) based on their age, seniority, and level of responsibility. They have an obligation, however, to make reasonable efforts to mitigate their damages…to find reasonable comparable employment. You can’t get the money twice. Once you find the new job any money you make is deducted from what the judge will award. If your deal with the employer is already signed and sealed, however, it’s not a concern.
If your deal is not done and the matter ends up in a courtroom you will be cross-examined on your job search efforts and documentation. A terminated employee in British Columbia who had spent years in the gas and energy sector as a salesperson decided it was time for a career change. Three months after his termination he stopped looking for work in his industry and decided to become a financial planner. He had to do course work and certification to start that job and of course, the revenue he generated at first was very low.
At trial the employer argued that they didn’t have an obligation to fund his career change. They had a right to expect that he would look for employment in the industry in which he was familiar and in which he was most likely to find reasonably comparable employment. The employer’s arguments were successful to some extent and instead of being awarded 16 months’ lost wages he was awarded 13.
That’s not a drastic reduction but it could have been easily avoided.
When a client tells me that they are using the opportunity of their termination to change career paths , I give them two options. I will encourage them to make whatever change they like but, while doing it, continue to conduct and document a reasonable job search in their old industry. It takes more energy to focus on both things but it is protection against an employer’s argument that the damages should be reduced. Some people have the energy and organization skills to follow that advice and will continue to document a job search while working on a career change.
For others who suspect that their commitment to both activities may wane, I give the second option. I tell them to settle immediately and quickly for as much as they can get without taking the matter further. There is no point in investing time and energy and leaving themselves without those settlement monies only to find that their claim is compromised because of the lack of job search documentation.
The gentleman I referred to above from British Columbia was lucky. A judge has complete discretion as to how much she will reduce an employee’s damages as a result of their failure to mitigate. Given that he had abandoned his job search in his old industry after three months, he was lucky that his damages were only reduced from 16 months to 13 months. It could have been far worse.
When people lose their positions in long-held jobs there is, often, a considerable amount of anger. Whether the termination was a result of a nasty new boss or general industry reductions, there is still resentment. Employees feel disempowered and try to get that power back by squeezing every dime they can out of the old employer. That is their privilege and in some cases nothing less than what the employer deserves.
For those seeking a new career path, however, the best path to happiness is often just to negotiate the best deal possible and then leave it behind. Nobody will be looking over your shoulder and second-guessing your choices and you can focus on your new dreams without distraction.
Ed Canning practices labour and employment law with Ross & McBride LLP, in Hamilton, representing both employers and employees. You can email him at email@example.com