When an employee is terminated from their employment, whether it
be by constructive dismissal or otherwise, the employee has a duty
to mitigate his/her damages by seeking alternative employment.
However, does an employee have a duty to accept employment with the
very same employer who terminated his/her employment in order to
fulfill the duty to mitigate his/her damages? This is a question
that many terminated employees struggle with.
The Ontario Court of Appeal recently considered an appeal from a
trial decision wherein the trial judge found that the terminated
employee had failed to mitigate his damages when he declined to
return to work for his former employer and, therefore, he was not
entitled to damages.
The employee in this case was laid-off and two weeks thereafter
commenced an action seeking damages for constructive dismissal. The
employer had mistakenly believed that they could legally lay-off
the employee and in fact, later admitted that the employee had been
constructively dismissed. However, upon realizing their error, the
employer offered the employee his job back only days after the
commencement of his claim. The employee refused to return to his
position, alleging amongst other things, that by returning to work
for his prior employer he would be subjected to an atmosphere of
hostility, embarrassment or humiliation.
The trial judge applied the principles enunciated in the leading
Supreme Court of Canada decision in Evans v. Teamsters Local
Union No. 31  1 S.C.R. 661, which outlines when a
dismissed employee must return to work for the same employer to
mitigate his/her damages. In the circumstances of this case, the
trial judge determined that the terminated employee's refusal
to return to work for his prior employer was unreasonable.
On appeal, the employee argued that simply because he left the
company when he was laid-off and thereafter sued the company for
wrongful dismissal, the employment relationship between the parties
"was acrimonious and infused with animosity"thus
justifying why he could not return to work for his prior employer.
However, this argument was rejected by the Ontario Court of Appeal,
based on the record before the Court. The Ontario Court of Appeal
affirmed the trial judge's decision, which resulted in no
damages being awarded to the terminated employee based upon his
failure to mitigate his damages.
This case is important for terminated employees in two respects:
firstly, it stresses to terminated employees the need to take a
contextual approach in evaluating whether or not it would be
reasonable for them to return to work for their prior employer, if
offered, in order to mitigate their damages; and, secondly, it
serves as a strong reminder to all terminated employees that the
duty to mitigate their damages should be taken very seriously. If a
terminated employee is found to have failed to mitigate their
damages, they may not be awarded any damages, even if they are
found to have been wrongfully dismissed.
Chevalier v. Active Tire & Auto Centre Inc. 
O.J. No. 3414, affirmed  O.J. No. 4092 (C.A.)
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