Canada: Constructively Dismissed? You May Have To Go Work For Your Old Boss

The recently released Ontario Superior Court of Justice decision, Gent v Strone Inc.1 reiterates the importance of an employee's duty to mitigate damages by accepting an offer of re-employment from his or her former employer after being constructively dismissed.

The Facts

Strone Inc. is in the business of providing emergency restoration and remedial services to commercial, municipal, and industrial entities. In 2014, the company suffered a decline in business, and subsequently laid off employees in January and October 2015. In addition, it temporarily laid off three employees with the plan of recalling them when business improved. One of these temporarily laid off employees was David Gent, a Health & Safety Training Specialist who had been working for the company for approximately 23 years.

On October 15, 2015, Mr. Gent was informed by Strone's Vice President of Operations and Planning that he had been laid off due to the company's decline in business. However, Mr. Gent was advised to keep the company informed of his availability and contact information so that he could be recalled as soon as possible when the company's situation improved.

Less than two weeks later on October 27th, Strone Inc. was advised by Mr. Gent's legal representative that Mr. Gent's temporary layoff was being construed as a constructive dismissal. Strone advised Mr. Gent's legal representative that there was a potential opportunity for Mr. Gent, and the company would confirm by November 9th. In response, Mr. Gent's legal representative advised that Mr. Gent would not be resuming employment with Strone Inc. and would be commencing an action against the company. Nonetheless, on November 10th, Strone Inc.'s counsel provided Mr. Gent's counsel with an offer of re-employment for Mr. Gent. The company later followed up and was told that Mr. Gent would not be returning.

The Lawand the Result

Ultimately, the court determined that Mr. Gent was constructively dismissed by Strone Inc. The court explained that Mr. Gent's knowledge of the company's business decline and his conduct in providing the company with his availability to be recalled was not enough evidence to be able to conclude that he agreed to the variation of the terms of his employment. As such, the court declared that Mr. Gent was entitled damages for the reasonable notice he was supposed to receive with regard to his termination by Strone Inc. These damages were subject to Mr. Gent's duty to mitigate his damages.

...the court outlined an employee's duty to mitigate damages by accepting an offer of re-employment from their former employer.

It was Strone's position that Mr. Gent failed to mitigate his damages by rejecting the company's offer of re-employment. The court agreed with this argument. In its analysis, the court referred to the 2008 Supreme Court of Canada decision, Evans v Teamsters, Local 31.2 In Evans, the court outlined an employee's duty to mitigate damages by accepting an offer of re-employment from their former employer. The court stated that the primary consideration in this circumstance is whether a reasonable person would accept the opportunity of re-employment. On this point, the court referred to the 1989 Ontario Court of Appeal decision, Mifsud v MacMillan Bathurst Inc.,3 in which the court decided that it would be reasonable "[w]here the salary offered is the same, where the working conditions are not substantially different or the work demeaning, and where the personal relationships involved are not acrimonious."4 In Evans, the court also explained that it was important to consider subjective factors in addition to the objective standard, such as "work atmosphere, stigma and loss of dignity, as well as nature and conditions of employment..."5

Mr. Gent advised that he did not accept Strone's offer of re-employment because it would have been too embarrassing for him to return to work. The Court, in this case, considered "whether a reasonably objective individual in his circumstances would not have concluded that returning to work would be too embarrassing, humiliating, and/or degrading."6 In evaluating the evidence, the court determined that a reasonable person would not have come to this conclusion.

The court decided that due to Mr. Gent's failure to mitigate, he was only entitled to damages from the date he was laid off (October 15, 2015) to the date he was offered re-employment (November 10, 2015). This was a mere 3.5 weeks. As such, Mr. Gent's dismissal damages amounted to only $4,846.50. The court noted that had Mr. Gent not failed to mitigate his damages, the reasonable notice period would have been 18 months.

This case is a reminder to employers to consider making offers of re-employment to limit their damages' exposure to wrongful dismissal claims. This case is also a cautionary tale to employees that one man's view of what is embarrassing by returning to work after being constructively dismissed may not be construed as embarrassing to the ever elusive "reasonable person".

Footnotes

  1. 2019 ONSC 155 [Gent].
  2. 2008 SCC 20 [Evans].
  3. (1989), 70 O.R. (2d) 701 (Ont. C.A.).
  4. Ibid at para 31.
  5. Supra note 2 at para 30.
  6. Supra note 1at para 38.

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