Failure to Mitigate proves Costly to Plaintiff in Constructive Dismissal


Time Published on September 24, 2013

In a recent decision of the Ontario Court of Appeal, Chevalier v. Active Tire & Auto Centre Inc., an employee with 33 years of service was awarded no damages on account of his failure to mitigate.

The Plaintiff had been employed with the Defendant as the manager of its automotive and tire centre in Niagara Falls. The company laid-off the Plaintiff due to the poor financial performance of the facility.  The lay-off was a result of a mistaken belief that employees could be laid off due to economic circumstances. The plaintiff commenced an action for wrongful dismissal two weeks later. Five days after the claim commenced, the company recalled the Plaintiff to his previous job with the same responsibilities, hours and benefits. However, the plaintiff declined to return to work.

The Plaintiff had worked for the company and a predecessor company for a combined total of 33 years. At the time of termination he was 55 years of age. The trial judge found that the reasonable notice period in these circumstances was 24 months.

The main issue in this case pertained to the Plaintiff’s duty to mitigate. The company did not dispute that the Plaintiff had been constructively dismissed. However, it argued that the Plaintiff failed to mitigate his damages when he refused to return to work after it offered reemployment.

The case law provides that under the duty to mitigate, an employee is only required to return to work for the same employer where a reasonable person would accept such an opportunity. Factors include whether the salary offered is the same, the working conditions are substantially similar and the work environment is not hostile or humiliating.

The Plaintiff argued that the company had engaged in a campaign of harassment and intimidation against him in an attempt to garner his resignation.  He contended that his work had been unfairly criticized and that his contractual rights were ignored when he was required to work in Toronto for a period of time which was over 50 kilometers from his home. He argued that his work environment had been poisoned and that he was not obligated to return to work for the company to mitigate his damages.

The trial judge found that a reasonable person in the Plaintiff’s circumstances would have accepted the company’s offer to return to work. The Plaintiff’s failure to do so resulted in no award of damages for pay in lieu of notice.

The Plaintiff was unable to establish that the employer engaged in a campaign of harassment that caused him to leave the company. The trial judge found that the alleged conduct on the part of the company’s personnel was not intended to harass or intimidate the Plaintiff but instead to improve his performance. The trial judge also took into account that the decision to lay-off the Plaintiff was made under a mistaken but honest belief that a lay-off was an option in the circumstances.  The Court of Appeal declined to interfere with the trial judge’s decision.

An employee will not be expected to return to work with the same employer in all circumstances. As mentioned above, the employer must satisfy the test of whether a reasonable person would accept the job. If, as in this case, the employee is offered the same or similar position and there is an absence of humiliation or hostility, then failure to accept could lead to serious consequences for the employee who chooses to litigate and fails to mitigate.

Tag wrongful dismissal litigation