A Rare Success For Employers: An Employee's Failure To Mitigate

It is well-established that employees have a legal obligation to minimize damages post-termination by attempting to find comparable alternative employment. If an employee brings a wrongful dismissal action, employers will often include an allegation that the employee failed to mitigate their damages as part of their defence. The onus for proving a failure to mitigate rests on the employer. It must be shown that:

the employee failed to make reasonable efforts to find new employment, and that if reasonable efforts had been exerted, other employment would have been successfully secured. The burden is exceptionally high for an employer to prove an employee's failure to mitigate. Rarely do Courts find that a wrongfully terminated employee failed in his or her duty to mitigate; however, in Steinebach v Clean Energy Compression Corp, 2015 BCSC 460, the employer was successful in proving the employee had failed to mitigate his damages.

In that case, the employee was terminated without cause after 19.5 years of employment at Clean Energy Compression Corp, a supplier of equipment in the compressed natural gas (CNG) industry. Prior to termination, the employee had been promoted to the position of, "Vice President Business Development Canada"; a high level sales position requiring a specialized set of skills, expertise and experience pertaining to the CNG industry.

The Court determined that the employee had been terminated without just cause and awarded a reasonable notice period of 16 months.

The Court then addressed the allegation of failure to mitigate. The employee had been terminated on May 2, 2014. He started his search for new employment in mid-June 2014. The Court considered a variety of case law concerning the appropriate adjustment period an employee is entitled to before commencing a new job search following dismissal. The time taken by the employee before starting his job search was found to be acceptable.

The Court then examined the details of the employee's job search efforts. The employee searched for an opportunity similar to the position he had held prior to termination; that being one of a senior title in business development and sales management in the CNG industry. He was not successful in finding a similar position as he believed each opportunity encountered to be a poor match for his qualifications, experience and desired job location.

By the end of July 2014, the employee had made the decision to undergo a career change. He was...