Court Rules: Can Declining a Job Offer During Notice Period Affect Your Severance Pay?

The Case of a Long-Serving Part-Time Employee

The Alberta Court of Justice recently handled a wrongful dismissal claim involving a part-time receptionist who had worked just one day per week for over 14 years. The employee, in her early 40s with two undergraduate degrees, sought damages for payment in lieu of notice, loss of benefits, and punitive damages.

She argued for a substantial notice period due to her lengthy service, while the employer countered that her claim was excessive and that she failed to mitigate her damages by not actively seeking alternative employment.

Dispute Over Reasonable Notice Period

The court emphasized that the reasonableness of notice depends on factors like the character of employment, length of service, age, and availability of similar jobs. While the employee cited cases supporting a longer notice, the court found them not comparable. Instead, it reviewed employer-submitted cases with similar positions and tenure, noting a strong market for administrative roles.

Limited Job Search Efforts

The employee's mitigation efforts were minimal:

• She sent her first job inquiries over two months after termination.
• Over four months, she made only a handful of inquiries.
• She avoided standard online job platforms, using only social media groups.
• For over a year, she sent formulaic emails to fewer than 20 employers.
• There were months-long gaps with no job search activity.
• She kept no log or record of her efforts.
• Her search was restricted to roles matching her previous schedule, pay, benefits, and location, with no attempt to explore other fields.

The court stated that while employees don't need to start searching immediately, they must eventually commit to finding replacement employment.

Evidence of Available Comparable Positions

The employer demonstrated that over 100 comparable positions were posted on job platforms during the notice period, most for administrator or receptionist roles. The employee applied to only a few. Witnesses testified to high demand for administrative staff, especially on weekends. The court found that similar employment was readily available, reinforced by a job offer the employee received months after termination.

Employment Offer Declined by Worker

The employer argued that declining this offer constituted a failure to mitigate, but the court disagreed. It recognized the employee's legitimate reasons for refusal, stating that personal preferences and due diligence in job acceptance are valid. However, the offer helped confirm that comparable jobs existed.

Supplementary Income During Notice Period

The employer sought to reduce damages by the income the employee earned from another job she held concurrently. The court examined whether this was replacement income (deductible) or supplementary income (not deductible). Since she continued the same schedule without increase, it was deemed supplementary. Income from her spouse's business was also not deducted, as she received no compensation.

Punitive Damages Sought

The employee claimed punitive damages, citing the employer's initial reliance on an employment agreement and requiring her to sign it upon returning from maternity leave, which she argued was discriminatory. The court noted that such pleadings are common in employment cases and dropping them before trial is not unusual. It found the maternity leave issue not condoned but not sufficiently reprehensible for punitive damages.

Court's Final Determination

The court stressed that mitigation efforts must have consequences; otherwise, the principle is meaningless. Considering the limited job search, abundant comparable positions, and the job offer, it ruled for a shorter notice period. The employee received loss of benefits on a pro-rata basis but no punitive damages, as the employer's conduct did not meet the high standard for such awards.