How Will CERB Impact Wrongful Dismissals?

It is well understood that former employees looking to commence a wrongful dismissal suit are expected to take reasonable steps in mitigating their losses. If no reasonable efforts are made to secure comparable work, this could negatively affect the potential awards you could seek. But what does the duty to mitigate look like during the Global Pandemic? What about the employees who lost their jobs and claimed the Canadian Emergency Response Benefit (CERB)? Would this be considered mitigation? How will CERB impact wrongful dismissals? This article provides a high-level overview regarding COVID benefit programs and whether these payments can be considered a form of mitigation, thus reducing any potential wrongful dismissal damages awards.

What is CERB?

During the height of the Global Pandemic, the Canadian Government announced CERB as a means of helping those who may have lost their employment due to COVID. If you were eligible to participate in the CERB program, you would have received $2,000 a month.

CERB has since been closed and has been replaced with new programs such as the EI Emergency Response Benefit (EI ERB) and the Canada Recovery Benefit (CRB)

Can CERB Impact Wrongful Dismissals?

Can CERB be considered mitigation and deducted from wrongful dismissal damages awards? As of October 2020, CERB is no longer active. However, the Canadian government has introduced other programs with similar benefits as CERB. As a result, the following question still remains: can CERB or other equivalent benefit payments be deducted from wrongful dismissal damage awards? What will be the impact of CERB on wrongful dismissals?

In a recent case, Iriotakis v. Peninsula Employment Services Limited, the Court analyzed this question. Ultimately, the Court ruled, based on this specific set of facts, that CERB should not be deducted from the Plaintiff’s wrongful dismissal damages awards. Notably, in paragraph 21, the Court explained:

CERB was an ad hoc programme and neither employer nor employee can be said to have paid into the program or “earned” entitlement overtime beyond their general status as taxpayers of Canada. The level of benefit paid (approximately $2,000 per month) was considerably below the base salary previously earned by the plaintiff to say nothing of his lost commission income. On balance and on these facts, I am of the view that it would not be equitable to reduce Mr. Iriotakis’ entitlements to damages from his former employer by the amount of CERB given his limited entitlements from the employer post-termination relative to his actual pre-termination earnings. I decline to do so.

It is important to note that the Court emphasized the fact that the CERB income received by the Plaintiff was significantly lower than his previous income with his former employer. As a result, it would be unfair to count his CERB income towards his mitigation efforts, given the difference between his pre-termination income, which heavily relied on commissions and his post-termination income.

For similar scenarios, it is likely the Courts will use this line of reasoning when assessing CERB related income and mitigation issues. However, in other scenarios where CERB income received may be comparable to an employee’s pre-termination income, arguments could be made that CERB should be counted as mitigation and deducted from a potential wrongful dismissal award.

Conclusion

In conclusion, there is no clear answer regarding CERB and other equivalent payments and if they would be considered mitigation income. Although in Iriotakis v. Peninsula Employment Services Limited,  the Court ruled that CERB would not be counted as mitigation income, this reasoning was applied to a very specific set of facts. For that reason, it is unclear if CERB would be counted as mitigation in other scenarios. It is best to speak to an employment lawyer about your specific set of facts regarding mitigation issues relating to CERB.

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If you are an employer who is facing a wrongful dismissal claim or an employee who believes you’ve been wrongfully dismissed, our team of experienced workplace lawyers at Achkar Law can help. Contact us by phone toll-free at +1-800-771-7882 or email us at [email protected] and we would be happy to assist.

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Disclaimer: This blog is not intended to serve as or should be construed as legal advice and is only to provide general information. It is in no way particular to your case and should not be relied on in any way. No portion or use of this blog will establish a lawyer-client relationship with the author or any related party. Should you require legal advice for your particular situation, fill out the contact form, call (800) 771-7882 or email [email protected].