Do You Have To Accept A Lesser Position After Being Terminated?

• Published date: 25 November 2022
• Subject Matter: Employment and HR, Unfair/ Wrongful Dismissal, Employee Benefits & Compensation, Employment Litigation/ Tribunals
• Law Firm: Lerners
• Author: Mr George A. Hamzo

It is trite law to say that where an employee has been terminated from indefinite-term employment, they have an obligation to mitigate their losses. Indeed, many severance packages offered to terminated employees include a requirement that the employee continues to seek alternative employment. Questions can arise, however, as to the extent of this legal obligation.

In Lake v. La Presse, 2022 ONCA 742, the court provided some further guidance. In that case, the Plaintiff appealed a summary judgment in a wrongful dismissal action. The motion judge had awarded damages equivalent to six months' reasonable notice after deducting two months for failure to mitigate and the compensation already paid by the employer over the notice period. The only issue on appeal was whether the motion judge erred in reducing the appellant's wrongful dismissal damages for failure to mitigate.

Background of Lake v. La Presse

The appellant was hired in August 2013 and worked for the respondent for five and a half years as General Manager. She was the most senior employee in the Toronto division, reporting to the Vice-President of Sales and Operations in Montreal. In this capacity, she managed a sales team to generate advertising revenue in Toronto and English Canada. The appellant's compensation consisted of an annual base salary of $185,000 with a car allowance, annual bonus, pension, and other benefits. She was 52 years old at the date of her dismissal. The appellant's employment was terminated after the respondent decided to close its Toronto office. She was notified on March 25, 2019, that her employment would end effective May 30. She stopped working for the respondent on April 30, 2019. After the termination of her employment, the appellant conducted a job search, but she remained unemployed at the date of the summary judgment motion, two years after the dismissal. The motion judge reduced the notice period of eight months by two months to account for the appellant's failure to take reasonable steps to mitigate her damages. In particular, the motion judge determined that the employee was required to seek out a lower-paying job after a reasonable amount of time had elapsed after the termination, and the employee had not obtained a similar paying position.

The Court of Appeal...