Does a terminated employee have a duty to accept an offer of
re-employment after termination? This issue was recently considered
by the British Columbia Court of Appeal in Fredrickson v Newtech Dental
The employee had been employed as a dental technician assistant
in a small dental practice for a period of eight and a half years.
Upon returning from a leave of absence, she was told that she had
been laid off due to insufficient work. She was provided with a
record of employment and a letter of reference. The plaintiff took
the position that her employment had been terminated and demanded
termination pay. The company responded by taking the position that
she had not been dismissed and directed her to return to work. The
company also stated that if she had been dismissed, she was
obligated to mitigate her damages by accepting the offer of
The employee did not return to work and instead commenced a
wrongful dismissal action. A day later, the company offered her
re-employment again, this time with an offer to pay her unpaid
wages from when she was initially to return from her leave of
absence until the company made its original offer of
re-employment. The company made three other similar offers in
the months to follow. However, these offers only included wages
back to the date of the initial offer, not to the return to work
Applicable Legal Principles
In Canada, employees who are terminated from employment have a
duty to mitigate their damages. An employer may provide a
terminated employee with an offer of re-employment. This can put
the employee in the "hot seat" so to speak. If the
employee rejects the offer, they risk receiving no damages for pay
in lieu of notice on account of a failure to mitigate.
However, employees do not need to accept re-employment with the
terminating employer in all circumstances. The legal test is
whether a reasonable person in the employee's position would
have accepted the employer's offer. This analysis takes into
account factors such as the work atmosphere and stigma, as well as
the nature and conditions of employment.
The trial judge found that the plaintiff failed to mitigate her
damages by refusing the offer of re-employment, and only awarded
notice period damages for the period when her leave ended to when
the first offer of re-employment was made, which was approximately
The British Columbia Court of Appeal overturned the trial
judge's decision. The Court found that the trial judge erred in
two ways. First, it reasoned that none of the offers would make the
plaintiff whole, as none accounted for the full period of loss. The
plaintiff would be left with a claim for lost income, which would
put her at odds with her employer.
Second, the Court reasoned that the actions of the employer
eroded the mutual trust that must be present in order for a
continued relationship. The Court relied on the fact that the owner
of the company had recorded conversations that he had with the
plaintiff without her knowledge, and subsequently made use of the
conversations. As well, the owner engaged in a conversation
with another employee, where he agreed that the plaintiff would
likely be too embarrassed to return to work. The Court found that
by discussing the situation with another employee in a small work
environment, the owner breached the confidence that one would
expect from their employer.
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Whether a court will find that an employee must mitigate by
returning to work for the terminating employer all boils down to
reasonableness. In this case, the Court found it was unreasonable
to expect the terminated employee to accept the offer of
re-employment due to the employer's conduct. As this case
illustrates, especially in small work environments, one or two
inappropriate comments can have a significant impact on whether the
terminated employee has a duty to accept a re-employment offer.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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