In Farwell v. Citair, Inc. (General Coach Canada), 2014 ONCA
177, the Court of Appeal makes an important point with respect to
the application of the principles of mitigation in a constructive
A 58 year old employee with 38 years of service was transferred
from the position of Operations Manager Vice President of
Operations to a Purchasing Manager. The position of Purchasing
Manager was a position that he had held many years earlier and the
transfer would have left him reporting to someone who had been his
subordinate. His income would have remained almost the same
however. The trial judge found that the employee had no obligation
to accept the Purchasing Manager position given that, viewed
subjectively, it would have been humiliating and embarrassing for
him to take the position.
On appeal the employer argued that the trial judge had erred in
viewing the obligation to mitigate subjectively, notwithstanding
her correct self instruction that the test was objective.
Importantly, however, the employer argued that the decision to
transfer the employee was driven by economic considerations and not
any attempt to stigmatize the employee. The Court of Appeal was
sympathetic to the argument that an employee's obligation to
mitigate by remaining with his or her employer was an aspect of
what, in law, is known as "efficient breach". The Court
of Appeal also recognized that there may have been merit in the
employer's argument that the court misdirected itself in taking
a subjective approach to assessing, for the purposes of mitigation
work atmosphere, stigma and loss of dignity. That said, the appeal
was dismissed because of another obstacle which the court deemed
"insurmountable". The court stated:
To paraphrase Evans, the
Appellant's mitigation argument presupposes that the employer
has offered the employee a chance to mitigate damages by returning
to work. To trigger this form of mitigation duty, the Appellant was
therefore obliged to offer Mr. Farwell the clear opportunity to
work out the notice period after he refused to accept the position
of Purchasing Manager and told the Appellant that he was treating
the reorganization as constructive and wrongful dismissal.
Farwell v. Citair, Inc. emphasizes the importance of an employer
reiterating to the employee alleging constructive dismissal that a
new position is available to him or her in mitigation.
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