The recent Ontario Superior Court decision of Fillmore v. Hercules SLR
Inc. provides a useful summary of the current state
of the law on offers of re-employment and a duty to mitigate.
The plaintiff had been employed as the defendants' Director
(Purchasing), with an annual salary of approximately $80,000,
together with benefits.
He was fired without cause after having been employed for over
The plaintiff sued and the matter proceeded by way of motion for
As there was no signed Employment Agreement, the Court assessed
reasonable notice with reference to the usual factors, including
the plaintiff's age, length of service, character of his
employment and the availability of similar employment. The
Court found that the appropriate period of reasonable notice was 17
Complicating the matter was the fact that when the plaintiff was
presented with a letter terminating his employment, he was given a
second letter offering him the "permanent full-time role of
Supervisor of Service" at a salary of $60,000 per annum, with
his previous salary being maintained for a period of six months
"to assist him in the transition from the current role to the
The plaintiff declined the offer of new employment at the lower
At the motion, the defendant argued that the plaintiff had been
offered a reasonable opportunity to mitigate his damages by
returning to work for the defendant and that by failing to accept
that offer, he had failed to discharge his duty to mitigate his
The Court began its analysis by referring to the decision in the
Supreme Court of Canada in Evans v. Teamsters Local Union No.
31, where the Court held that in some circumstances,
it may be necessary for a dismissed employee to mitigate damages by
returning to work for the same employer. It was suggested
that in the absence of the employee facing a potential hostile
atmosphere, embarrassment or humiliation, he may have to mitigate
by "taking temporary work" with the dismissing
In this case, the defendant simply provided the plaintiff with
an offer to accept a demotion.
The Court observed that had the offer of the lower position been
presented by a third party employer during the notice period, and
had the plaintiff chosen to accept it, the plaintiff could have
still looked to the dismissing employer for compensation for the
difference between his previous salary and his new salary. In
this case, the dismissing employer's offer made no reference
whatsoever to compensation for that difference or to the idea that
the plaintiff could accept the demotion and still pursue a claim
for that difference.
Accordingly, the Court held that the plaintiff did not fail to
mitigate his damages by refusing the new offer of employment.
This analysis gives rise to an interesting, but unanswered
question. What if the plaintiff had responded to the new
offer of employment by suggesting that he would accept it provided
that he was doing so without prejudice to his right to make a claim
for the difference in salary for what would ultimately be
determined by a Court to be a reasonable period of notice? If
he had done so, and the employer refused to accept that condition,
in my view that would have put an end to the question of any
possible failure to mitigate. For dismissed employees being
offered new employment at a reduced salary, that might be a prudent
course of action to take.
The fact is that there are not an abundance of guidelines around
this issue. To a very significant extent, the question of
whether or not to fault a dismissed employee for not accepting a
new offer of employment is within the discretion of the
judge. While the Supreme Court of Canada has made reference
to factors such as embarrassment and humiliation, that does not
necessarily end the matter. While there is much to be said
for leaving it to the Court's discretion, the lack of
predictability inherent with that approach means that both sides
have to give the issue very careful thought.
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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