Court of Appeal Gives Employees
a “Brake” on Mitigation
THE DECISION COULD BE GOOD NEWS FOR WRONGFULLY DISMISSED EMPLOYEES
The recent Court of Appeal decision in Brake v. PJ-M2R
Restaurant Inc. has significant implications for employers
involved in wrongful dismissal litigation. The court clar-ified
a number of issues concerning mitigation income
that can be used to offset a reasonable notice award in damages. It
could be said that the decision in Brake can have the effect of plac-ing
a wrongfully dismissed employee in a better position than they
would have been in had the employment contract been fulfilled. In
this regard, Brake runs contrary to the foreseeable damages prin-ciple
articulated more than a century ago in Hadley v. Baxendale.
Brake v. PJ-M2R Restaurant Inc. concerned the dismissal of Esther
Brake. Brake was employed at various McDonald’s restaurants
for more than 25 years. She worked her way up to a manager
position, and held this position from 2004 to 2012 at three sep-arate
McDonald’s restaurants owned by the defendant, PJ-M2R
Restaurant Inc. Brake had received strong performance reviews for
over 10 years, but her ratings saw an accelerating decline beginning
in 2010. As a result, in 2012 Brake was placed on McDonald’s
progressive discipline program, known as the Goals Achievement
Process (GAP). After 90 days, Brake was told she had failed the
GAP program and was given a choice between demotion and ter-mination.
Brake refused the demotion and was terminated. She
brought an action for wrongful dismissal against PJ-M2R.
At trial, the judge found that Brake’s poor performance did not
amount to cause for dismissal and held that she had been con-structively
dismissed. Brake was awarded damages equivalent to a
20-month notice period.
COURT OF APPEAL DECISION
The Court of Appeal upheld the trial judge’s decision. The court
then considered income that Brake had earned during the notice
period. Brake had received Employment Insurance (EI) benefits,
and had worked as a cashier at Home Depot, Sobey’s and Tim
Hortons after being dismissed.
The court held these amounts were not deductible as mitiga-tion
income because they were earned during the statutory notice
By Hendrik Nieuwland
alice-photo / Shutterstock.com
HRPROFESSIONALNOW.CA ❚ OCTOBER 2017 ❚ 39