Wrongful Dismissal and COVID-19

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At Hutchison Oss-Cech Marlatt, we pride ourselves on providing up to date advice and information in employment law, including the impact of the COVID-19 Pandemic on employment law and the assessment of employment law claims. Dana G. Quantz at our firm has provided the below summary to help people consider their legal rights in this pandemic.

Wrongful Dismissal

First, we must set out exactly what is a wrongful dismissal. A wrongful dismissal is when an employer terminates the contract of employment (whether one exists in writing or it is verbal) in breach of their legal obligations. A breach of their legal obligations most commonly includes failing to give adequate notice that their job is ending. An employer is entitled to dismiss an employee for any reason or no reason at all (except for reasons in breach of statutory obligations like the BC Human Rights Code, the Employment Standards Act, or the Workers Compensation Act). In other words, there is no right to ongoing employment.

Instead, an employee has a right to notice that their job is ending (unless the employee has misbehaved so badly that just cause is being alleged by the employer). This notice can be set out either in a written contract or it is determined in accordance with the common law based on several factors including age, type of employment, tenure, and availability of alternative employment. While it is possible that employers give actual working notice to an employee that their job is ending (i.e., a person entitled to two months’ notice is told two months in advance that their job is ending), most employers opt to terminate an employee immediately and pay salary in-lieu of that notice.

Background of Case

In today’s case of Moore v Instow Enterprises Ltd., 2021 BCSC 930, an employee of Kal-Tire was terminated from his employment of over 26 years on a without cause basis. Due to the pandemic, Kal-Tire ‘s business had decreased to the point that a senior salesperson like Mr. Moore did not have work. Kal-Tire laid off Mr. Moore and he sued for wrongful dismissal where the court set out the basic legal considerations for evaluating reasonable notice of termination as follows:

[15] It was common ground between the parties that Mr. Moore’s employment lasted approximately 26.5 years, and that he was dismissed without cause.

[16] Pay in lieu of notice is intended to provide a gap to tide an employee over while they search for new employment. Both parties agree that, as a general principle, employees are entitled to roughly one month of notice per year of service: Stanley v. Advertising Directory Solutions Inc., 2014 BCSC 376 at para. 64. There is a rough upper limit, as contemplated in Ansari v. B.C. Hydro & Power Authority (1986), 2 B.C.L.R. (2d) 33 (S.C.) [Ansari], of 18–24 months. Factors indicating a lower notice period is appropriate can include shorter length of service and the relative availability of similar employment. Overall, appropriate notice period is a matter to be determined on a case-by-case basis and there is no set formula.

[17] Mr. Moore’s position is that determining an appropriate timeframe for pay in lieu of notice should consider factors such as the character of employment, length of service, age of employee, and availability of similar employment with regard to an employee’s experience, training, and qualifications: Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.Ct.J.) [Bardal].

Mr. Moore asked the court to award him 24 months reasonable notice based on these factors and Kal-Tire submitted that reasonable notice should be closer to 12 to 16 months. Two issues drove the difference between the employer and the employee: the character of employment and the impact of the pandemic. In this post, we will focus on the second issue.

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Impact of the Pandemic

In assessing reasonable notice, the court looked at the availability of alternative employment as a reason to extent reasonable notice. The court reasoned that:

[27] While Mr. Moore is not entitled to greater notice simply by virtue of the COVID-19 pandemic, the current pandemic impacts on the relative availability of similar employment. The same economic downturn which impacted Kal Tire has impacted other businesses within the tire industry and the economy in general. Kal Tire identified a list of job postings that they submit would have provided reasonably similar employment to Mr. Moore’s previous job in commercial tire sales. Several of these jobs were in tire sales, others were in related industries or involved senior sales positions. Aside from submitting his resume, absent a cover letter, in response to several postings for similar commercial tire sales jobs, Mr. Moore did not actively pursue any of these opportunities.

[30] The recently released decision of Goetz v. Instow Enterprises Ltd., 2021 BCSC 709, concerned another Kal Tire employee in very similar circumstances to Mr. Moore. Mr. Goetz was a Commercial Sales Representative who was 53 years old and had been employed for 31 years. He was awarded 18 months’ pay in lieu of notice, discounted by two months for failure to mitigate and by a further one month as a contingency reduction. In total, Mr. Goetz received 15 months’ pay in lieu of notice.

In short, the court awarded Mr. Moore 20 months’ reasonable notice for losing his position subject to deductions for mitigation and previously paid notice of 8 weeks under the Employment Standards Act. However, the pandemic also plays into the issue of mitigation. Mr. Moore says that he did a diligent search for employment and, when he could not find work, he started his own woodworking business. The Court found his efforts were not reasonable stating the legal test for mitigation as follows:

[34] A dismissed employee has a duty to mitigate their losses by seeking comparable employment: “the duty of mitigation required [the plaintiff] to act reasonably and diligently, in his own interest, in pursuing alternative employment” (Coutts v. Brian Jessel Autosport Inc., 2005 BCCA 224 at para. 25).

[35] Our Court of Appeal summarized the duty to act reasonably in seeking alternative employment in Forshaw v. Aluminex Extrusions Ltd. (1989), 39 B.C.L.R. (2d) 140 (C.A.) at pp. 143-44 [Forshaw]:

The duty to “act reasonably”, in seeking and accepting alternate employment, cannot be a duty to take such steps as will reduce the claim against the defaulting former employer, but must be a duty to take such steps as a reasonable person in the dismissed employee’s position would take in [their] own interests – to maintain [their] income and [their] position in [their] industry, trade or profession. The question whether or not the employee has acted reasonably must be judged in relation to [their] own position, and not in relation to that of the employer who has wrongfully dismissed [them].

[36] Similarly, in Dodge v. Signature Automotive Group Ltd., 2014 BCSC 1452 at para. 21, Macintosh J. wrote:

It is never easy to pound the pavement and knock on doors after one has been let go from a job, particularly after many years. But it is, nonetheless, the duty of a plaintiff employee to act reasonably so as to secure new work if it is available. In my view, it was impossible for the Plaintiff to know what the job market held for [them] when [they] did not do enough to learn what the prospects really were. Literally knocking on doors, leaving resumes, asking to have lunch and taking other such steps are necessary…

Obviously, it is difficult in the middle of a pandemic to pound the pavement and knock-on doors when the provincial health officer is advising you to stay home. So, it is here where the court writes about the pandemic:

[37] Mr. Moore’s evidence was that he created a resume and did computer searches for available jobs. There is less evidence that he actively applied for those jobs. Mr. Moore testified that he sent his resume, without a cover letter, in response to several postings that he saw within the tire industry. He did not reach out personally to pursue these employment opportunities, nor did he otherwise reach out to contacts. Mr. Moore relies on Forshaw, for the proposition that mitigation efforts are required to be reasonable, but they are not required to be perfect.

[38] A job search in COVID times must necessarily look different. Physically knocking on doors or invitations to lunch are not reasonable job search expectations during COVID-time. Mr. Moore nonetheless has an obligation to take active steps to search for reasonably similar employment. This could include phone calls, cover letters, emails, use of a headhunting employment search service, or otherwise reaching out and connecting with potential employers. I find that reasonableness in the circumstances required Mr. Moore to cast a net further than the very limited pool of commercial tire sales, and take steps beyond his limited efforts.

[39] A job search is an active prospect, and it can be a difficult and onerous one. It requires more than creating a resume and conducting computer searches. Looking at job postings, absent further action, is not sufficient to fulfill the requirement that a person undertake a reasonable job search. A reasonable job search may include activities such as reaching out to contacts within the industry, writing cover letters setting out why you qualify for a position, following up with telephone calls, or email correspondence.

[40] Understandably, Mr. Moore has experienced difficulty in searching for new employment. He was employed with Kal Tire for over 26 years – nearly half of his life. Searching for employment at any age is hard. Searching for employment when you were a senior and successful sales representative of a company for over 26 years undoubtedly has added difficulties. The added difficulty with searching for employment after being laid off from a lengthy and successful career does not diminish Mr. Moore’s obligation to do so.

[41] Mr. Moore has an obligation to mitigate his damages and to actively search for alternative employment. He has not done so. His obligation is not limited to searching for exactly the same, or a nearly identical, job that he has been terminated from. I find Mr. Moore limiting his search to solely commercial sales in the tire sector to be unreasonable in the circumstances. A reasonable job search requires a willingness to explore how one’s experience and skills may be portable to other industries or areas. Reasonably similar employment could encompass senior sales jobs in other industries, another job in the same industry, or a job with a different title or in a different industry that makes use of similar skill sets, aptitude, and experience. In determining what employment is reasonably similar, some flexibility is required.

In the end, the court reduced Mr. Moore’s claim for damages by three months’ salary for his less than whole-hearted effort to find alternative employment.

Seek Legal Advice

If you are an employee who has been dismissed from their employment, then we encourage you to speak to one of our lawyers regarding wrongful dismissal and other potential employment law claims. Contact us and we can help you evaluate whether you have a viable claim.

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