The purpose of severance is to bridge the gap while a person is unemployed and looking for a new job. As we often tell clients, severance is not intended to provide a windfall. When a person is dismissed from a job, they have an obligation to make reasonable efforts to offset the losses stemming from their dismissal (referred to as the “duty to mitigate”). In the right circumstances, this may include accepting an alternate offer of employment with the same employer or pursuing a reasonable opportunity that has been brought to their attention.
Another One Bites the Dust: Understanding the Law of Termination Clauses in Ontario
2024 got off to a bang in the world of employment law. In a recent trial level decision, an Ontario judge has found yet another termination clause illegal and unenforceable. In so doing, the court accepted an entirely novel argument for why termination provisions may be read as impermissibly contracting out of the mandatory requirements of the Employment Standards Act, 2000 (the “ESA”).
Time to Expand the Search? The Duty to Mitigate in a Remote Work World
Individuals in Ontario have a duty to mitigate their loss of employment when seeking damages for wrongful (or constructive) dismissal. In practical terms this means that while employees may be able to seek damages from their former employer (to put them in the position they would have been had they received adequate notice of termination), they must make reasonable efforts to replace their lost income by looking for, and accepting, other comparable work.
Be careful what you wish for: litigation lessons for employers
When is 2.5 Months "Reasonable Notice" of Dismissal?
In wrongful dismissal cases, absent a lawful written contractual entitlement, the courts conduct an individualized assessment to determine what would be reasonable notice of the dismissal. In a recent contribution to First Reference Talks (a collaborative HR and employment law advisory blog), Paul Willetts highlighted two wrongful dismissal cases where the short-service plaintiffs who otherwise differed significantly (in terms of age, compensation and character of employment), both received a 2.5 month notice period.
Do older employees have a duty to mitigate loss of employment?
Dismissed employees are expected to actively search for new work if they want to preserve full severance rights. Yet a recent case out of Ontario suggests there may be more leniency for older workers. This reflects a judicial acknowledgment of the fact that re-employment opportunities tend to become scarce past a certain age.
Wrongful Dismissal Damages During COVID-19: Offsets and Repayment Obligations
In the Eye of the Beholder: Job Titles, Character of Employment and Severance
When Ontario courts assess whether an employee has been wrongfully dismissed, they often start by referencing the 1960 decision of Bardal v. Globe & Mail Ltd., 1960 CanLII 294 (ON SC).
Bardal directs courts to consider several factors specific to the employee when determining appropriate severance, including: 1) character of the employment; 2) length of service; 3) age at the time of termination; and 4) availability of similar employment.