Where a general failure to mitigate has been found, a judge may apply his or her discretion to assess the consequential impact on the claim. Typically the court will consider a discount to the claim. The degree of such discount is contextual.
This was the case in Ata v Carter Pontiac Buick released in April of 2002, in which Justice Burnyeat of the British Columbia Superior Court stated:
[45] I am satisfied that the Defendant has met the heavy burden of proving that Mr. Ata failed in his duty to mitigate his damages. Whether he was content to collect benefits from H.R.D.C. or whether he attempted to establish himself as a broker, I am satisfied that the Defendant has shown that Mr. Ata did not make reasonable efforts to find employment of a like nature.
[46] However, I am satisfied that it is not appropriate to deduct from the damages awarded the same monthly equivalent of what Mr. Ata earned during 1997 and 1998. First, I am not satisfied that it is reasonable to assume that the day after an employee has gone through the trauma of being fired that he or she most immediately seek alternate employment to avoid the criticism that they are not mitigating their damages. Rather, I am satisfied that it is appropriate for a reasonable period of adjustment and recovery to be available to an employee whose employment has been terminated. Second, I am not satisfied that November and December are the best months to be seeking employment in any line of work. Third, if reasonable efforts had come to fruition, I am satisfied that it would not be the case that the commission income of a car salesperson would immediately return to the post-termination level. While I find that Mr. Ata had a loyal following and while I am satisfied that he is a very able car salesperson, I also find that it would not be reasonable to assume that his monthly earnings would instantly return to what they were in 1997 and 1998. Taking all of those factors into account, I am satisfied that there should be no reduction of the damages available to him for the months of November, 1998, December, 1998 and January, 1999 but that the damages in the remaining 6 months of the 9 month notice period should be reduced by a factor of 50% to reflect the decreased employment income that should have been available to him if he had used reasonable efforts to obtain like employment.
The 50% reduction applied in the later months hence reflected the expected time period it would take for the plaintiff to establish his customer base and earn commissions.
The earlier reference to the January of 2004 decision of the Nova Scotia Supreme Court decision in Chambers v Axia Netmedia noted that the court found a failure to mitigate and reduced the common law notice period of 11 months by 3 months.
Less Remuneration - Modest Reduction
The B.C. Court of Appeal considered this issue of what consequences should flow from a finding of a failure to mitigate in April of 2005.
The plaintiff had been employed as sales manager for four and one half years for which the trial judge awarded 30 weeks’ notice, of which 11 weeks had been served as working notice. A defence of mitigation had been raised on the Rule 18A motion which was not successful on first instance.
The plaintiff’s title was misleading as he had no one reporting to him. His sole function was to sell Ferraris. He was first given 11 weeks of working notice to terminate May 20, 2003 after which he was instructed by letter dated May 12 that the closing was to take effect May 26 and he was to have the option of working until that date.
The motions judge found that the plaintiff was primarily interested in selling Ferraris and in doing so with a new Ferrari dealership and that he was overly optimistic as to the likelihood of him doing so successfully and he had failed diligently to pursue other opportunities and had he done so “he probably would have found work by the end of August 2003”.
The Court of Appeal found that the motions judge was wrong in law in determining that he did not have a duty to accept employment at less remuneration. The evidence had shown that the plaintiff discussed opportunities with two other dealerships, but did not actively pursue them as he was expecting an offer from a new Ferrari dealership. For that reason the notice period was reduced and ended as of August 31, 2003, which amounted to a reduction from 30 weeks to 25 weeks’ notice.
Six month reduction - 20 to 14 months
A similar conclusion was reached in the December 2009 decision of the Alberta Queen’s Bench in Johnson v Top-Co. Following termination, the plaintiff was approached by two companies to discuss employment opportunities, neither of which received a response from the plaintiff. There was no evidence of likely salary of such positions presented at trial, nor was there any evidence presented as to the suitability of these positions. It was determined that the failure of the plaintiff to inquire as to these prospects was a failure to mitigate. Also the employer’s evidence as to the difficulty it encountered to replace the plaintiff as Production Manager was considered in the context of this issue. The plaintiff had also decided to increase his land holdings and cattle herd to continue work as a self-employed farmer. The court concluded that he had “made a decision not to seek employment in the wage economy”.
The notice period awarded of 20 months was reduced by 6 months due to this finding.
Two Month Offset
In 2021, the B.C. Supreme Court again found a failure to mitigate. The discount was modest, reducing the 18 month award by two months for this factor.
Degree of Reduction Arbitrary
It would be a fruitless task to examine all cases in which a mitigation failure has been found to assess the degree of the discount to be imposed. As noted by the Manitoba QB: 1
Again, there is little to be gleaned from the case law as to how to quantify a failure to mitigate. In the absence of evidence of a specific job that was available to the plaintiff, the amount by which damages are reduced seems to be arbitrary.
This finding of a failure to mitigate is not limited to lackluster job search. This may also follow where the plaintiff has accepted a lesser paying job. Such was the finding by the B.C. Court of Appeal in its 2016 decision. 2 This was preceded by an argument that had the plaintiff not done so, he may have found success in replacing his income:
In the present case, the judge concluded that the respondent’s decision to pursue an investment counsellor career was not reasonable and that he might have been able to replace his lost income with a more focused search. The difficulty is that, unlike in Coutts, there is no finding of when he might have found alternative employment. In my view, that is essential to support the conclusion that the respondent did not act reasonably and to support any reduction in damages based on a failure to mitigate for a period of time.
There was no evidence offered as to the likely events, had he continued to seek comparable employment. A new trial was ordered due to this finding. The court stated:
It is likely that the judge concluded that the respondent failed to mitigate for three months or perhaps that had he pursued searching for a job in the natural gas industry, acceptable employment would have been secured in 13 months. The difficulty is that there is no analysis to support a three month failure to mitigate or the date at which employment might have been secure. Both conclusions are mere speculation which is not open to this Court.
[44] Simply put, this Court is not in a position to determine when the respondent reasonably might have secured acceptable employment or the duration of the period in which he failed to mitigate his damages.