The Ontario Divisional Court has recently upheld the trial
judgment in Ghanny v. 498326 Ontario Limited (Ghanny), a case we
here. In Ghanny, Justice Belobaba held that a former
employee's wrongful dismissal action could not succeed because
he failed to mitigate his losses after rejecting another position
offered to him by his employer.
After being informed of his pending termination as a Service
Manager at a Toyota dealership, the appellant (Mr. Ghanny) was
offered another management position with the same salary at another
nearby dealership. Mr. Ghanny, however, ultimately rejected
such offer because he was of the view that his years of service
would not be recognized by the new dealership and that the
financial viability of such dealership was uncertain. This
decision was made by Mr. Ghanny despite assurances to the
contrary. At trial, Justice Belobaba held that Mr. Ghanny
could have mitigated his damages by accepting the proposed new
position, and thus dismissed his action.
On appeal, the Divisional Court ultimately agreed with
Justice Belobaba. In particular, it held that Justice
Belobaba applied the correct legal test for mitigation and that
there was sufficient evidence to support his findings. In
doing so, the Court's decision serves as a recent confirmation
that an employee's refusal of a reasonable offer of employment
can limit, and in some cases entirely eliminate, a claim for
wrongful dismissal damages.
Interestingly, the Divisional Court noted that had Mr. Ghanny
accepted the new position, he would not have been precluded from
subsequently making a claim for damages as against the Toyota
dealership that terminated him if matters had not worked out at the
new dealership. This weakened any argument Mr. Ghanny had as
to why his refusal of the offered position was reasonable. In
this sense, an employee hesitant to accept alternative offered
employment out of a concern that their continued employment in the
new role is uncertain may still be required to do so as a
mitigation measure while maintaining the right to bring an action
against their initial employer if their damages are not fully
mitigated through the new employment.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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