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January 17, 2017

Providing employment coaching can help reduce wrongful dismissal payouts


People who have lost their jobs can sometimes benefit from talking to a professional about how to get back into the job market. Such advice has many flavours, such as traditional outplacement services, career counseling or a job coach.

Employers are not legally obligated to provide such help to staff whose employment has recently been terminated. Some employers nonetheless see it as the right thing to do.

Now, an evolving area of the law suggests that, in at least some cases, the offer of career counseling might also help protect the employer’s bottom line.

It may come as a surprise to some, but an employee’s post-employment job search is relevant to assessing wrongful dismissal damages. That’s because such damages are intended to help bridge an employee to their next job; they’re not supposed to be a windfall to the employee. Following that logic, if an employee doesn’t look for a new job after termination, it can reduce or eliminate the employer’s obligation to pay wrongful dismissal damages.

The catch is that the burden of proof is on the employer, not the former employee, to show that they failed to look for other work. That’s where career counselling services come in.

The case of Maxwell v United Rentals (2015) provides this sobering commentary:

[I]t is significant that the defendant offered no assistance to the plaintiff in seeking and obtaining alternate employment.  Although an employer is not obligated to provide such assistance to the dismissed employee, that is an important factor to be taken into consideration when the employer then accuses of the former employee of not taking adequate steps to secure alternate employment. As I said in Aucoin:

I am not suggesting that the employer has an obligation to provide outplacement counseling to a dismissed employee or to bring job opportunities to the intention of the former employee but if an employer intends to argue the failure to mitigate on the part of the former employee, it would be well advised to present evidence of assistance that was offered to the terminated employee during his or her job search. [citations omitted]

coaching.jpgThis line of reasoning has been picked up in other contexts. In Drysdale v Panasonic Canada Inc (2015), the employer had collected 370 job ads in an attempt to prove that other work was readily available to the employee if he had been looking hard enough. The judge was not impressed, and instead found:

The defendant offered the plaintiff no assistance in searching out these job postings and therefore it does not lie readily in the defendant’s mouth to criticize the plaintiff afterwards for not pursuing these specific job opportunities.  … Here, the defendant raised the issue of available job postings after the fact and only in the course of this litigation.  Prudence would have dictated that the employer make this information available to the employee in a timely way to assist him in his transition. 

These cases were more recently applied in Merritt v Tigercat Industries (2016), and Ontario courts have likely not seen the last of this type of reasoning.

For people whose employment has recently been terminated, there may be a feeling that such “help” from their former employers is intrusive and unwelcome. However, they turn down the assistance at their peril, since an employer will almost certainly introduce evidence of the refusal to show an employee wasn’t serious about job hunting.

On the flip side, these cases potentially put employers in a double bind. They bear the onus of proving that there was other suitable work in the job market. But unless they were actively helping — either by paying for a career coach or by providing job listings they intended to rely on — they risk being greeted with skepticism by a judge.

As a result, there may be discomfort from both employers and employees about this issue. If you’re on either side of the table, it may be wise to consult with a lawyer to determine the best course of action.

By Marcus McCann; photo by Kullez (Flickr), used under creative commons lincence

Millard & Company specializes in employment and human rights law and has represented parties in many cases both inside and outside of the courtroom.

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