$25,000 Reasons to Mitigate your Damages

This case demonstrates the old idiom – don’t go throwing good money at bad.

Here, in the recent case from the Ontario Superior Court, Sinnathamby v The Chesterfield Shop Limited, the Plaintiff, Ms. Sinnathamby, was a fourteen year employee at the defendant Chesterfield Shop. The Plaintiff’s employment was terminated for just cause; the Chesterfield Shop alleged she failed to provide medical documentation to support an absence from work. Conversely, the Plaintiff alleged that she was wrongfully dismissed; that Chesterfield Shop lacked just cause. The Plaintiff argued she was entitled to $135,000 for wrongful dismissal damages and Honda v. Keayes damages (i.e. bad faith damages).

In the result, the court agreed with the Plaintiff, holding that Chesterfield Shop failed to prove it had just cause to terminate her employment.  In the court’s view, while the Plaintiff’s behaviour was inappropriate, her immediate termination of employment was disproportionate to the misconduct in question. Her failure to provide the doctor’s note in a timely fashion did not amount to misconduct sufficient to justify the summary dismissal of a 14-year employee.

With regard to her wrongful dismissal, the Plaintiff argued that she was entitled to a reasonable notice period between 14 and 18 months given her age (45 years) and 14 years tenure. Conversely, Chesterfield Shop argued that the appropriate notice period was 8 to 10 months, in consideration of the Plaintiff’s low salary ($37,500) and administrative role.

In the result, the court sided closer with Chesterfield Shop, concluding that a 10 month notice period was appropriate.

Mitigation

The Plaintiff failed to mitigate her damages. Indeed, the Plaintiff acknowledged that she did not look for new employment for 15 months after the termination of her job. Accordingly, the court reduced her damages, but not as significantly as one might have excepted. The court went easy on her, taking away only 4 months of damages (leaving her with pay in lieu of notice of just six months).

Bad Faith

The Plaintiff alleged she had been terminated in bad faith and that Chesterfield Shop was liable for Honda v. Keays damages.

Nonetheless, the Plaintiff’s bad faith argument was unsuccessful. The court found that:

  • She lacked any medical evidence demonstrating that she suffered mental distress, and;
  • Chesterfield Shop genuinely thought that it had sufficient grounds to terminate for cause in the face of her refusal to provide a doctor’s note.

Thus, in the end, the Plaintiff was only awarded $20,904, based on six months’ salary alone.

High Legal Fees

I was shocked to read that the Plaintiff’s legal bill upon the conclusion of the trial was more than $65,000, which is at least more than three times her award ($20,904).

The court did award the Plaintiff a portion of her legal costs (i.e partial indemnity costs) of $23,000 for being marginally successful, as is the court’s usual practise. However, she still came out of this whole matter $25,000 poorer!

Employees must learn from this decision. If you are going to sue, and spend the big bucks, you must have attempted to mitigate your damages. Getting your winnings cut in half could pulverize your profitability when accounting for legal expenses. In other words, don’t sue unless you have been looking for a new job!

Employees should also note that this is an outlier case, much more expensive than usual. I cannot explain why this case cost so much, as these reasons are not available in the text of the case, and I wasn’t involved.

Dutton Employment Law is a leading Canadian employment and labour law firm. Contact one of our employment and labour lawyers if you have any questions concerning this blog post, or employment and labour law in general.

Directories which we support:

DMOZ Free Directory Submission
Special Education Directory
http://www.usalistingdirectory.com/index.php?list=latest

Leave a Reply

Your email address will not be published. Required fields are marked *