Mitigation is critical in unlawful dismissal disputes

January 18th, 2012 by

When a terminated employee decides to sue their former employer for damages, an important factor (which is often neglected) on the part of the suing employee is their responsibility to mitigate their losses resulting from the termination. Without proper mitigation, or the necessary documentation of mitigation efforts, the former employee may be entitled to a significantly reduced damage award.

Mitigation entails that the employee has made reasonable efforts to find new employment. Such efforts can be demonstrated by documenting all online job searches, preparing an updated resume, and utilizing the services of an employment agency or search firm. It is important to note that the mitigating claimant does not need to necessarily accept any offer of employment that comes their way, but merely must prove that reasonable attempts were made.

The case of Leo Magnan, a nearly 30 year employee of Brandt Tractor in Alberta, provides a cautionary tale regarding the failure to mitigate damages resulting from an unlawful termination. Mr. Magnan was forced to retire, based on an unwritten company policy that demanded employees to step aside by age 65. Upon reaching 65 years of age, Mr. Magnan expressed his desire to remain employed, but the company refused, relying on the company policy that Mr. Magnan had consented to. Though Brandt Tractor eventually offered Mr. Magnan his job back, he refused the offer, and successfully sued the company based on constructive dismissal. Unfortunately, due to Mr. Magnan’s earlier indications that he would have accepted his forced retirement, and his failure to look for new work upon termination, the court only awarded him 3 months of income as a damage award, where he would have been entitled to a significantly larger notice period award, given his many years of service.

To summarize, despite the legitimacy of your claim for unlawful dismissal, if you cannot prove a financial loss by making reasonable efforts to find new employment, your damage award may be significantly reduced.

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