In the recent decision of
Ghanny v. 498326 Ontario Limited, the Ontario Superior Court of
Justice held that a former employee's wrongful dismissal action
could not succeed because he failed to mitigate his losses when he
rejected another position offered to him by his employer.
Aleem Ghanny (Mr. Ghanny) had been an employee of a Toyota
dealership for 18 years when he was informed that his position as
Service Manager was to be terminated as a result of management
reorganization. Upon informing Mr. Ghanny of this decision, the
dealership owner offered him another management position with the
same salary at a nearby Suzuki dealership, a recently acquired and
related business. Mr. Ghanny, however, refused the offer for two
(2) reasons: i) he thought his seniority at the Toyota dealership
would be lost if he relocated, and ii) he was concerned that the
future of the Suzuki dealership was uncertain. The owner,
however, made it clear to Mr. Ghanny that his seniority would be
transferred to Suzuki, and that whatever the future of the Suzuki
dealership was, his job would not be at risk.
A month after his termination, Mr. Ghanny brought a wrongful
dismissal action. Shortly thereafter, the dealership owner again
offered Mr. Ghanny the replacement position, though Mr. Ghanny
rejected it for a second time. He eventually found a lower-level
position earning three-quarters of the salary he had been offered
at the Suzuki dealership. The employer argued at trial that the
action should be dismissed based on Mr. Ghanny's failure to
mitigate his losses by accepting the offered position.
At trial, Justice Belobaba dismissed Mr. Ghanny's action and
found that his initial refusal of the replacement position was
unreasonable. Citing the Court of Appeal's decision in
Misfud v. MacMillan Bathurst Inc
., Justice Belobaba found that a reasonable person would be
expected to take up a replacement job offered by his dismissing
employer "[w]here the salary offered is the same, where the
working conditions are not substantially different or the work
demeaning, and where the personal relationships involved are not
acrimonious." Based on the assurances that the owner had given
to Mr. Ghanny that his seniority would remain intact and that his
job was safe, Justice Belobaba had no difficulty in finding that in
refusing the replacement job Mr. Ghanny had not mitigated his
damages. Despite Mr. Ghanny's arguments, Justice Belobaba held
that the replacement job offer was not unclear or ambiguous, nor
was there a factual basis for Mr. Ghanny to fear that the Suzuki
dealership was in financial difficulties. Thus, he dismissed
the action with costs in favour of the employer.
Justice Belobaba noted that had Mr. Ghanny's claim been
successful, he would have awarded Mr. Ghanny a reasonable notice
period of 14 months. This period was arrived at in light of
Mr. Ghanny's age of 47 years, his 18 years of service, and the
difficulties that he encountered in finding other work in the fall
of 2008 as the financial crisis was taking hold.
This case serves to reassure employers that an employee's
duty to mitigate their damages may include accepting a replacement
job offered by their employer. This will likely be the case
where the job offered is comparable to the former position in
regards to compensation and working conditions, and the work
environment is not acrimonious. In circumstances where such factors
are not comparable, however, a court may well hold that an employee
was not required to mitigate.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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