Plotnikoff v Associated Engineering Alberta Ltd., 2023 ABCJ 200 (Higa) is a new Alberta Court of Justice decision touching a number of employment law issues. Ultimately, the Defendant’s employment contract did not reduce the reasonable notice entitlement of the Plaintiff, and the Plaintiff’s lackluster efforts to find re-employment after his dismissal did not result in a “failure to mitigate”.
This case is important because it affirms several important base principles in Alberta employment law.
Facts
The following were the facts summarized by the ACJ:
- The Plaintiff Mr. Plotnikoff worked as an employee for Associated Engineering Alberta Ltd. for almost 10 years when his employment was terminated without cause
- The employer paid the plaintiff the minimum notice required by the Alberta Employment Standards Code, but no further amount towards reasonable notice of termination at common law
- The employee sued for wrongful dismissal, claiming for reasonable notice (severance)
- The employer’s main defense was that the written employment contract between the parties only required payment of the statutory minimum, and that the employee was not entitled to any further notice at common law
- The employer’s secondary defense was that the employee had “failed to mitigate” his damages by failing to adequately look for work after termination of employment. If successful, this argument could lead to a dramatic reduction in the amount of severance the employee was entitled to
- Plotnikoff was 33 years old at the date of termination, had a 2 year Civil Engineering Technologist diploma from University of Lethbridge, and had worked only ever used his education in his job for the defendant
- The plaintiff had no supervisory or managerial functions in his role
- After termination of employment, the Plaintiff did not look very seriously for re-employment – his efforts to find a job were described by Judge Higa as “rather leisurely”. However, there was no evidence of any jobs he could have secured if he had looked seriously
Analysis / Conclusion
The employee had a written employment contract with the employer. The employer argue at trial that the following clause had the effect of removing the employee’s implied entitlement to common law reasonable notice:
Termination without Cause: The Company may terminate employment without cause upon providing the Employee with notice as may be mandated by the Employment Standards legislation or such additional notice as the Company, in its sole discretion, may provide or, at our option, pay in lieu of such notice.
The ACJ analyzed the clause and concluded that it did not “clearly and unambiguously” limit his common law rights, so he was entitled to common law reasonable notice. Below is some of the pertinent reasoning:
[15] What clause 4(c) provides is for a minimum period of notice as determined by the Code “… or such additional notice as the Company, in its sole discretion, may provide…”. [emphasis added]
[16] As the Court of Appeal determined in Bryant, inclusion of the words in clause 4(c) “or such additional notice”, recognizes that a period of notice extending beyond the Code requirement is a realistic possibility.
[17] AE submits the words in clause 4(c) “with notice as may be mandated by the Employment Standards legislation” is a distinguishing factor. [emphasis added] I disagree. In my view, those words simply establish Mr. Plotnikoff’s minimum period of notice and compliance with statutory requirements under the Code.
The ACJ went on to calculate the Plaintiff’s reasonable notice (severance) to be 10 months. Of particular significance to the trial Judge was the fact that the Plaintiff had only worked for this one employer since obtaining his education at Lethbridge College, and the nature of his job duties meant that he had “singular experience for a singular employer.”
Finally, the ACJ considered whether the Plaintiff, in his “rather leisurely” efforts to find comparable employment, had failed to mitigate his damages. There is generally a two-part test for whether an employee has failed to mitigate reasonable notice damages, and an employer needs to satisfy both parts: (1) did the employee fail to take reasonable steps to find comparable employment? (2) If they had taken reasonable steps, would they likely have found it? If the answer to both these questions is “yes”, the employee has failed to mitigate.
Judge Higa found that the Plaintiff had failed to take reasonable steps to mitigate his damages. However, defendant had not demonstrated that, had he taken reasonable steps to mitigate he would likely have found a comparable position. There was therefore no reduction in the reasonable notice.
My Take
I like this case because the facts remind me of lawschool final exam questions.
Most of the outcome of this case is about what I would have expected, given the facts.
Respecting the termination clause, courts do not generally relish in finding harsh termination clauses to be enforceable as against employees, and this has led to a substantial body of caselaw which consistently finds them to be unenforceable except in the clearest cases. With that backdrop, I would have been surprised if the clause in this case were interpreted to be enforceable.
This case was interesting regarding its reasonable notice assessment as well. On the one hand, the Plaintiff was young and had been in a non-management position. These factors tend to lower the notice period. However, he was employed there for 10 years, his employment seems to have been somewhat specialized, and he’d worked his whole career to date there – which are factors that would tend to drive up the notice period. The reasonable notice period is in the range I would expect- not at the high or low point.
The reasoning on “failure to mitigate” should serve as a reminder to management-side legal counsel that there is a difficult onus on management to prove failure to mitigate. The correct 2-part test is well-established, but sometimes where Judges think Plaintiffs have not taken the effort seriously, they will reduce the damages without really considering whether the Defendant has established that the Plaintiff would likely have become employed had they tried. That approach has led to some inconsistencies in the caselaw, which in my opinion has led to more litigation.
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