The principle behind common law notice, or pay in lieu of notice, is that it is meant to provide enough time and/or money for an employee to find an alternative position without forcing the employee to spend much, if any, of their life savings. For this concept to work, the employee needs to actively look for a job and accept an offer to work a job that is a reasonable alternative to their old job. This is called the duty to mitigate.

The duty to mitigate has limits. For example, a dismissed hospital CEO is not expected to work as a cashier at McDonald's to mitigate the damages from being dismissed. However, that hospital CEO should accept an executive position in their field so long as they do not have to accept a significant pay cut. Failing to mitigate could limit an employee's right to damages. Sharon Gannon learnt the cost of the failure to mitigate in Gannon v Kinsdale Carriers (2024 ONSC 1060).

Gannon v Kinsdale Carriers (2024 ONSC 1060)

In Gannon v Kinsdale Carriers, Sharon Gannon worked for Kinsdale Carriers Limited (Kinsdale), a trucking company, for over 22 years as an accounts receivable/dispatcher/office clerk. On December 16, 2020, the employees were provided two weeks of working notice that the business was closing on December 31, 2020. Sherry Lowes, the owner of Kinsdale, wanted to help her employees find new jobs as quickly as possible, so she provided Ms. Gannon with information to contact Zehr Transport Limited (Zehr), another trucking company. Although it was disputed, it was found that following an interview with Zehr, Ms. Gannon was verbally offered a job that would have been practically identical to her old job at Kinsdale. The job could have started not long after her job at Kinsdale ended. By a text message, Ms. Gannon refused the offer to work at Zehr. Ms. Gannon was able to secure new employment seven months later.

The judge found that Ms. Gannon failed to mitigate her damages. As an employee, Ms. Gannon was responsible for mitigating her damages by finding employment comparable in status, hours, and remuneration to the position held at the time of dismissal. In this case, the defendant, Kinsdale, was able to show that Ms. Gannon was offered a comparable position. Ms. Gannon's goal to find a job more in line with one part of her old duties was not a valid reason to reject the job. Since the failure to mitigate was proven, the judge found that Ms. Gannon was not entitled to reasonable notice damages. Further, the court found that Ms. Gannon was liable for Kinsdale's costs.

Takeaways from Gannon v Kinsdale Carriers (2024 ONSC 1060)

The decision in Gannon v Kinsdale Carriers serves as a reminder to employees that they must mitigate their damages by searching for and accepting reasonable offers of comparable employment. Employees cannot reject a comparable offer of employment because they want to change their career path.

However, employers must keep in mind that it is their duty to show that the employee failed to mitigate. In this case, the evidence was strong because Ms. Lowes used her contacts to help find her employees comparable work and the contact was willing to testify that they offered Ms. Gannon comparable work that she rejected. Although it may not be possible or practical to reach out to business contacts to see if they can hire your dismissed employees, it may be a good strategy to be able to lead evidence that the employee failed to mitigate if they reject the contact's comparable job offer.

How Suzanne Desrosiers Professional Corporation can help

Suzanne Desrosiers Professional Corporation has employment lawyers who are knowledgeable in wrongful dismissals and understand the duty to mitigate. If you are an employee or employer who is facing a wrongful dismissal case, it is important to speak to an employment lawyer as soon as possible. To speak to one of our employment lawyers, please call us at 705-268-6492 or email us at info@sdlawtimmins.com.