Do You Have To Take Any Job To Curb Your Losses From A Wrongful Dismissal? No Says Ontario’s Top Court
Ontario’s top court has recently affirmed that an employee is not required to take a substantially inferior position in order to mitigate damages for wrongful dismissal.
In this case the Plaintiff was a manager working for a particular McDonalds franchise for 13 years, she obtained a 7 year credit for service as a result of having worked a number of years previously for another McDonalds franchise.
After several years of exceptional employment reviews, in 2011 after receiving her first negative performance review she was offered a demotion to assistant manager. Although the rate of pay was the same the demotion meant a substantial decrease in her employment benefits. After the negative performance review the employee began working part time at Sobey’s as a cashier to supplement her income.
The Plaintiff declined the demotion. She made diligent efforts to find other employment, although she did not apply for any restaurant management positions particularly. Despite her efforts, after she left McDonalds she only made income in predominantly cashier type roles at grocery stores and coffee shops.
The Trial Judge’s ruling awarded damages and statutory entitlements to the Plaintiff. In so doing the Judge calculated 20 years of service for the Plaintiff by including the service credit from her previous employer. The judge also declined to deduct any income the Plaintiff made from her entitlement as a credit to the employer for mitigation.
The decision was upheld on appeal. The Court made important clarifications and affirmations to the law surrounding mitigation in the employment law context as follows:
- The court affirmed the well established principle that a demotion is tantamount to a constructive dismissal of an employee.
- If an employee finds part time work during her full time employment, any income from that part time work that could have been earned while she worked full time is not deductible earnings for mitigation in a wrongful dismissal claim.
- Employment income earned during the statutory notice period cannot be deducted by the employer.
- Employment income earned from a job taken out of necessity that is substantially inferior to the employees lost employment cannot be deducted as mitigation, and an employee is not required to take a substantially inferior job in order to mitigate.
The ruling serves as a caution to employers that deductions from a wrongful dismissal damages award are subject to limitations. The full decision can be found here: Brake v. PJ-M2R Restaurant Inc., 2017 ONCA.