Federal Court of Appeal Confirms that Amounts Earned by a Dismissed Employee are Deductible from a Damages Award due to Mitigation only if they are Referable to the Loss for which the Damages are Awarded

On April 26, 2016, the Federal Court of Appeal rendered its judgment in Bahniuk v Attorney General of Canada, 2016 FCA 127, allowing the appeal from the judgment of the Federal Court and setting aside a portion of a remedial award made by an Adjudicator of the Public Service Labour Relations Board. The appeal related to the Adjudicator’s decision to reduce the award for compensatory damages for unjust termination by all monies earned by the employee, Stanely Bahniuk, between the date of the termination and the date of the Adjudicator’s decision. This reduction was made by the Adjudicator despite the fact that Mr. Bahniuk did not earn income during the 14-month period to which the compensatory damages related.

In its decision, the Court confirmed that amounts set-off from contractual damages on account of mitigation must be referable to the loss for which damages were awarded. The Court was satisfied that the Adjudicator unreasonably set-off the amounts earned by Mr. Bahniuk in the time after the 14-month period for which he received compensatory damages for the unjust termination.

Mr. Bahniuk was represented by Andrew Raven and Amanda Montague-Reinholdt of Raven, Cameron, Ballantyne & Yazbeck LLP.