The Alberta Court of Justice recently dealt with a wrongful dismissal claim involving a long-serving part-time employee who worked only one day per week for over 14 years.
The worker was in her early 40s at the time of termination and held a receptionist position.
She had two undergraduate degrees, but for many years, her employment consisted of receptionist and front office duties.
The worker sought damages for payment in lieu of notice, loss of benefits, and punitive damages.
She argued she was entitled to a substantial notice period given her length of service.
The employer argued the worker’s severance claim was excessive, there was no basis for punitive damages, and the worker failed to mitigate her damages by not taking reasonable steps to find alternative employment.
The case raised questions about what constitutes reasonable notice for a part-time employee with significant tenure, and whether an employee who makes limited job search efforts has failed to mitigate damages.
Reasonable notice period disputed
The worker submitted that she was entitled to a substantial notice period based on her years of service. The employer submitted that a shorter notice period was appropriate.
The court noted that the reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service, the age of the worker, and the availability of similar jobs.
The worker provided authorities in support of her position for a longer notice period. However, the court found those decisions were distinguishable and the situations of the workers in those cases were not comparable.
The authorities presented by the employer were comparable to the worker’s position and tenure. The court reviewed cases involving similar positions with similar years of service.
The court considered the factors in determining the proper notice period. Of significance was the “availability of similar employment, having regard to the experience, training and qualifications of the servant.”
The employer tendered a significant amount of information relating to the availability of similar employment over a prolonged time period after termination. The evidence indicated there was an active market for administrative personnel.
Limited job search efforts documented
The court examined the worker’s attempts to find alternative employment after her employment ended.
The first step she took to find new employment was sending emails to potential employers over two months after termination.
For a four-month period following termination, the worker made only a handful of inquiries to potential employers.
She did not access well-accepted online job search forums. She limited her online search to accessing social media groups.
For a period of well over a year, the worker sent formulaic email inquiries to fewer than 20 potential employers.
At times, there were intervals of months where no evidence was submitted that the worker made any inquiries or took any steps to find employment.
The worker presented no evidence of any job postings she applied for or positions where she declined to submit an application.
She did not keep a log, journal or spreadsheet recording her mitigation activities.
The worker limited her job search to positions matching her previous schedule, requiring the same level of compensation and benefits and ideally close to her residence.
The worker made no attempt to canvass employment outside of her field, even though her duties were well-suited to similar types of jobs in other disciplines and industries.
The court noted that an employee does not have to start a search for employment upon termination immediately, but at some point, an employee must commit, focus and take steps to address the duty to find replacement employment.
Evidence of available comparable positions
The court also examined whether the worker could have found comparatively similar employment.
The court noted that it is the employer who must satisfy this element of mitigation.
However, an employer’s burden is to show that comparable and similar employment could have been obtained, not identical employment.
The employer submitted that over an extended period, well over 100 comparable positions were posted on standard online job search platforms.
A review of the postings supported the employer’s submission that those postings were for positions where the requisite skills and duties were similar to the worker’s position.
The overwhelming majority of the positions were advertised as administrator or receptionist. Of those numerous postings, the worker applied for only a small fraction of positions.
One of the employer’s co-owners testified there was an “extremely high demand” for administrative staff and that finding an individual with experience was “next to impossible.”
Another witness was directly involved in the management of multiple businesses during the worker’s notice period and testified that the demand for administrative staff was very high and greater for weekend staffing requirements.
The court found it was clear that similar and comparable employment was available to the worker.
That finding was reinforced by the worker receiving an offer of employment several months after termination.
The offer was for a position similar in type and duties to her employment and for the same schedule.
The offer presented a remuneration package that equaled and in parts exceeded the worker’s entitlements with her former employer.
Employment offer declined by worker
The employer submitted that the worker failed to mitigate her damages by not accepting the employment offer received several months after termination.
The court did not agree with this submission, stating: “I do not agree with counsel’s submission that [the worker] should have accepted the offer and then assessed whether the position was a good fit. One cannot fault an individual for conducting due diligence activities before accepting an offer of employment.”
The worker had legitimate reasons for declining to accept the employment offer.
The court stated: “The Court cannot step into her shoes and second-guess that decision. Making a decision where to work and who to work for are important decisions, based on individual and personal preferences and goals, in addition to considering the specifics of work duties, opportunities for advancement and remuneration.”
However, the employment offer assisted the court in determining whether there was comparable and similar employment available to the worker.
The employment offer was for an hourly wage close to the amount she was paid by the employer.
The employment offer was received several months after the worker’s employment was terminated.
The court noted that the process to determine the just amount in reduction of a severance award is difficult, as the exercise is based on assumptions and speculation, but the employment offer provided tangible evidence to assist the court.
Supplementary income during notice period
The employer submitted that the damages should be reduced by the amounts the worker received from her employment with another employer.
The court agreed that replacement income earned during the appropriate notice period is deductible from any damage award.
However, the court examined whether the income the worker earned from the other employer was replacement income and, therefore, deductible.
During the later stages of her tenure with the employer, the worker also worked at another location. She worked only one different day at that location and various times from home.
Those duties did not conflict with her work schedule, and the employer was aware of her employment at the other location.
After termination, the worker continued to work at the other location on the same schedule and terms. She did not increase her hours of work and did not work additional days at the other location.
The court examined whether post-termination income was to be considered replacement or substitute income, and therefore deductible from the damage claim, or supplementary income that the worker could have earned if her employment had continued, and thus not deductible.
The employer also submitted that the damages should be reduced by the income amounts attributed to the worker from her spouse’s business.
However, the worker testified she was not employed by the company and her only involvement was minimal assistance with deliveries. She received no compensation from the business, and income was attributed to her only for income tax splitting purposes.
Punitive damages sought by worker
The worker’s counsel submitted that punitive damages were warranted as the employer pleaded and continued to rely on the terms of an employment agreement.
The employer abandoned reliance on the agreement on the eve of trial. Counsel also asserted that the employer’s insistence upon the worker executing the contract immediately upon her return from maternity leave was discriminatory conduct worthy of sanction.
The court noted it is important that in her civil claim, the worker claimed and pleaded a modest amount in punitive damages, though counsel argued a much higher amount was warranted.
The court stated: “It would be a significant step for a Court to award punitive damages against a litigant based on one’s pleadings. It would be more noteworthy when that pleading is standard fare in employment litigation.”
Courts are called on to determine the enforceability of employment agreements on a daily basis.
Frequently and for various reasons, employers choose not to rely on those agreements, right to the commencement of trial proceedings.
Regarding the worker’s further submission in support of punitive damages, the court noted: “Requiring an employee returning from maternity leave to sign an employment agreement upon resuming employment is not a practice to be condoned.”
One of the employer’s co-owners explained that at the time, she was under the impression there was a break in the worker’s employment and upon return, she was starting new employment.
Court’s final determination and reasoning
The court examined the principle of mitigation and stated: “The principle of mitigation and the obligation of a terminated employee to mitigate would be rendered meaningless if there are no consequences for one failing to take reasonable mitigation efforts.”
The court considered whether the worker’s limited job search efforts, the evidence of numerous available comparable positions in the market, and the employment offer received several months after termination should impact the damages awarded.
The court stated: “The significant number of equivalent positions that may have been available to [the worker] justifies a shorter period of reasonable notice.”
The court also examined whether conduct by the employer in requiring an employee to sign an employment agreement upon returning from maternity leave rose to the level required for punitive damages.
The court considered whether such conduct was “harsh, vindictive, reprehensible and malicious” or “highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behavior.”
The worker was entitled to loss of benefit coverage calculated on a pro-rata basis for the applicable notice period.
The worker claimed additional damages for loss of other benefit coverage.
However, the worker testified that the coverage was maintained under her benefit entitlement with the different employer, and she incurred no out-of-pocket expenses for those services.