Here’s an odd case. In Serbanescu v. Span Manufacturing, decided recently by the Ontario Superior Court of Justice, the employer was arguing that it should have given the employee 5 months’ notice of termination and the employee was arguing the notice period was only 4 months. Why?
Well, in this unusual case, the employer had dismissed the employee and given him only 5 weeks’ notice after 3 years and a bit of service. He was earning about $55,000. The employee launched a wrongful dismissal suit, arguing for 6 months’ notice. However, he got a new job that paid $70,000 after only 4 months. So at trial, the employee argued that notice should be the time it took him to get a new job, or 4 months. The employer now said, no, no, although we tried to rip you off by giving you only 5 weeks’ pay, hoping you wouldn’t sue us (ok, it didn’t actually “say” that, but that is what happened), now we have seen the light and think we should have given you 5 months’ notice.
Why would the employer do that? The answer is that the law permits an employer to benefit from an employee’s mitigation. So if the notice period is set at 5 months’, and the employee got a higher paying job after only 4 months, the amount of damages the employee suffered is lessoned by the salary he earned in the fifth month. In other words, if the notice period here is 5 months, then the damages are (roughly): 5 months earnings from the old job at $55,000 minus one month at the new employer ($70,000). The employer that breached the employer contract by not giving proper notice receives the benefit of the employee’s effort to get a new and better job.
Here, the judge rules that the assessment of the proper notice period is to be done at the time of the dismissal, not later, after the parties learn how long it actually takes the employee to find new employment. So, applying the normal criteria, the Court rules 5 month’s is the notice period. Therefore, the employer gets the benefit of the new salary earned by the employee in the fifth month.