Terminated employees must think twice before accepting lower paying jobs

Most terminated employees wonder if their severance packages are fair or if they could be entitled to more. At common law, the legal test requires that terminated employees try to mitigate their damages by looking for another job. Employees have always been required to look for similar jobs at similar rates of pay.

The second half of 2022 has been marked by significant terminations, particularly in the tech sector.

 

The fact is, with much of the industry culling their workforces, it will be no small feat for terminated employees to find similar employment.

 

Most terminated employees wonder if their severance packages are fair or if they could be entitled to more. At common law, the legal test requires that terminated employees try to mitigate their damages by looking for another job. Employees have always been required to look for similar jobs at similar rates of pay.

 

But, what if there are not a lot of similar jobs available?

 

In the Ontario case of Lake v. La Presse, Merida Lake worked for La Presse (2018) Inc. — a french newspaper — for over five years as a General Manager. She earned a base salary of $185,000, a car allowance, a bonus, pension and other benefits. When she was terminated in March of 2019, she was 52 years old.

 

Lake was the most senior employee in the newspaper’s Toronto office and oversaw the sales team that brought in ad sales revenue for the newspaper. At the time of her termination, she had eight employees reporting to her.

 

Lake was given two months of working notice, however, she was unable to find work after her termination. Lake sued for wrongful dismissal damages and her case was heard at a summary judgement motion.

 

At the motion, heard several years later, Lake was still unemployed. Considering her position, income, age, and the availability of similar employment, the court awarded her eight months of reasonable notice. La Presse, however, argued Lake’s notice period should be reduced as a result of her lackluster efforts to mitigate her damages. La Presse relied on the fact that Lake had only applied for a total of 11 jobs during the eight-month notice period.

 

Ultimately the motion’s judge reduced Lake’s eight-month notice period by two months finding that, Ms. Lake should have applied for less senior roles that paid less as she remained unemployed following her termination.

 

Lake appealed the decision to the Court of Appeal of Ontario. While the court agreed that Lake waited too long before beginning her job search, the Court of Appeal found that she had taken reasonable steps to mitigate her damages, including detailing her search efforts on job sites daily, her networking efforts, using career transition services and private coaching.

 

Ultimately, Lake was awarded her eight-month notice period with no deduction for failing to mitigate.

 

This case is extremely helpful to recently terminated employees from sectors where there have been mass terminations, including the tech industry.

 

If there are not comparable roles available for you to apply to, the Court of Appeal has confirmed that you are not required to accept lower paying jobs. We can only assume provincial courts will consider awarding lengthier notice periods as a result of the lower availability of similar employment.

 

While it is incumbent on every employee to make best efforts on a daily and weekly basis to look for new work following a termination, if you can help it, hold out for a comparable role in terms of seniority, pay and perks.

 

This Court of Appeal confirms the court will not penalize you for taking your time to seek out a role that is just as senior and provides you with a similar level of pay.

 

Have a workplace issue? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.

 

The content of this article is general information only and is not legal advice.

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