Thursday, January 20, 2011

Ontario Employment Law: Calculation of the Period of Reasonable Notice and Mitigation of Losses

In a very recent wrongful dismissal case, Sebanescu v. Span Manufacturing Ltd., the Court was forced to grapple with the exact relationship between the period of reasonable notice to which an employee is entitled and mitigation of losses. In that case, the Plaintiff, an engineer with three years of seniority, was terminated by the Defendant without cause. The Plaintiff, however, post-termination immediately began an extensive job search and was fortunate in that he was able to secure new employment at a higher salary within four months of his dismissal.

At trial, the Defendant employer argued that it should be entitled to benefit from its former employee's efforts and that, at most, the Plaintiff should be entitled to four months of notice, the actual amount of time it took the Plaintiff to find new employment. The Plantiff countered by arguing that the period of reasonable notice was five months, the length of time it would normally take an employee in the position of the Plaintiff to find comparable employment upon termination.

In favouring the Plaintiff's position, the Court stated:
I accept the proposition that the appropriate period of notice is to be determined according to the usual criteria on the facts as known at the point of dismissal.

One such factor is the amount of time, as indicated in the Plaintiff's argument above, that it would ordinarily take a similarly situated person to find a comparable employment.

Taking into account other relevant factors - the Plaintiff's age, salary, length of service, and so on - the Court held that the Plaintiff was entitled to five months of pay in lieu of reasonable notice.

What we can take from the case is that where you have been wrongfully dismissed and make a super-human effort in securing a comparable position, you will not likely be penalized by receiving a greater reduction to the notice period than would have otherwise been the case had you not made that effort.

If you have been wrongfully dismissed, please contact a lawyer who can advise as to your rights and entitlements both under the Ontario Employment Standards Act and at common law.

- Robert Tanha, Toronto
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