An employer who decides to terminate the services of an employee, except in cases where there is just cause, must provide the employee with a reasonable notice period or damages in lieu of that notice period.
It is not uncommon for an employee to be terminated without having been paid damages by the employer or having been paid insufficient damages. In such cases, the employee will have to consider suing the former employer for wrongful dismissal. In addition to any legal action the employee may decide to take, the employee does have an obligation to make a reasonable effort to mitigate his or her damages by finding an alternate source of income.
An interesting question that was recently answered by the Supreme Court of Canada is whether this duty to mitigate includes returning to work for the employer who fired you.
Evans had worked as a business agent for the employer for more than 23 years. Following the election of the employer’s new executive, Evans was sent a letter of termination. The two sides then entered into negotiations for a compensation package for Evans. Five months later, the employer requested that Evans return to his employment to serve out the balance of his 24 month notice period. Evans agreed to return, but only if the employer rescinded its termination letter, something the employer was not prepared to do.
The Court of Appeal found that Evans had failed to mitigate his damages by not accepting the employer’s job offer. The Supreme Court of Canada agreed with this finding stating, “…the courts have correctly determined that in some circumstances it will be necessary for a dismissed employee to mitigate his or her damages by returning to work for the same employer. Assuming there are no barriers to re-employment, requiring an employee to mitigate by taking temporary work with the dismissing employer is consistent with the notion that damages are meant to compensate for lack of notice, and not to penalize the employer for the dismissal itself.”
The barriers to re-employment would include such things as whether the working atmosphere would be one of hostility, embarrassment or humiliation. Other elements which must be considered include any stigma and loss of dignity, the nature and conditions of employment and whether those conditions are substantially different, that the personal relationships involved are not acrimonious, the history and nature of the employment, whether or not the employee has commenced litigation, and whether the offer of re -employment was made while the employee was still working for the employer or after the termination.
The Supreme Court recognized that an employee may find it difficult to continue working for the employer. However, the Court also recognized that “it is an accepted principle of employment law that employers are entitled (indeed encouraged) to give employees working notice and that, absent bad faith or other extenuating circumstances, they are not required to financially compensate an employee simply because they have terminated the employment contract.”
In Evans’ case, the Court found that the relationship between he and his employer was not seriously damaged and the terms of employment were the same. Therefore it was not objectively unreasonable for him to return to work to mitigate his damages.Share