The decisions in Evans and Mifsud deal with the mitigation defence. Given a successful plea by the employer of failure to mitigate, this submission should not defend against the plaintiff’s claim for the statutory payments.

This presumes that (1) no advance notice of the change in employment terms (Mifsud) or termination (Evans) has been given and/or (2) there is claim available for statutory severance and/or notice. Ontario's statute is distinctive as it allows not only for statutory notice, capped at 8 weeks, but also severance of one week per year to a cap of 26 weeks where the length of service exceeds 5 years cumulatively and payroll exceeds $2.5 million annually.

To attain these sums even where there is such an adverse finding of failure to mitigate, it must be established that (1) it is possible to sue civilly for the statutory sums and (2) when a civil remedy is pursued, the ESA sums are payable without a mitigation obligation. The latter is firm law.

Suing for ESA - No ESA Offset for Mitigation

The Divisional Court of the Ontario Superior Court dealt with both issues in Boland v APV Canada in December of 2004. Justice Dennis Lane delivered the decision for the unanimous panel. The Court of Appeal in Ontario came to the same end in 2017.

The plaintiff had been employed in excess of 12 years when the defendant sold part of its business to Cimco Refrigeration. Cimco offered employment to the plaintiff which he declined due to the position taken by Cimco that it would not recognize his seniority. The defendant terminated his employment. He found new employment within three weeks at an increased salary.

The employer paid some, but not all, of his ESA entitlements. The plaintiff sued to claim the residual sum of the ESA claims and damages for wrongful dismissal. No claim was made under the ESA administrative process.

The plaintiff moved for summary judgment which was declined by Cameron. J. upon the reasoning that the sole remedy for the enforcement of an ESA sum was through the statutory scheme, requiring a complaint to the Ministry.

The issues put by the plaintiff to the Divisional Court on appeal were (1) can the plaintiff sue civilly to recover the ESA sums and (2) is such sum reduced by mitigated income. The Director of Employment Standards intervened and supported the plaintiff’s assertions.

The court concluded these submissions in favour of the plaintiff. This is clearly the law in Ontario. (see also Moldovanyi v Kohler, and Olivares v Canac)

Accordingly, even where there is a finding of failure to mitigate based on Mifsud or Evans, it is clear that, given a plea in the claim for the ESA sums due, there can be no defence.

This was indeed the decision of Galligan, J.1987. ¹

Buchanan refused an offer of employment from the company which had effected an asset purchase of Buchanan’s employer. The trial judge found that the alternate position extended by the new buyer company was one which Buchanan should have accepted and dismissed the common law claim. The court did, however, award the ESA sum. This decision was upheld on both issues in the Court of Appeal. It is submitted that the fact of an asset sale should be not be the critical issue. All that is required is a termination, constructive or otherwise.

Impact of ESA Obligation on Mifsud & Evans & Stat Recall

The decisions finding a failure to mitigate in Mifsud, (refusal of demoted position following constructive dismissal) Evans (refusal to work for the notice period following termination) and the declining of a return to work following a statutory lay-off may not negate the employer's obligation to pay the minimum statutory notice and/or severance.

As mentioned above, the failure to pay the statutory sum arguably would be bad faith conduct creating an atmosphere of hostility, negating the need to return to work. The emergence of this issue will complicate the employer’s position. It will then be in the unenviable position of being required to pay the statutory sum and also pay the employee upon his return to work.

The defence of the employer will be that the employee refused a reasonable alternate position to avoid this obligation. The regulation passed under the Ontario statute, O Reg 288/01 reads as follows:

Employees not entitled to notice of termination or termination pay

2. (1) The following employees are prescribed for the purposes of section 55 of the Act as employees who are not entitled to notice of termination or termination pay under Part XV of the Act:

1. Subject to subsection (2), an employee who is hired on the basis that his or her employment is to terminate on the expiry of a definite term or the completion of a specific task.

2. An employee on a temporary lay-off.

3. An employee who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.

4. An employee whose contract of employment has become impossible to perform or has been frustrated by a fortuitous or unforeseeable event or circumstance.

5. An employee whose employment is terminated after refusing an offer of reasonable alternative employment with the employer.

6. An employee whose employment is terminated after refusing alternative employment made available through a seniority system.

This would certainly be argued in a Mifsud case. The chronology is awkward for an Evans submission as the sequence of events generally is a termination followed by an offer to work for the notice period. This statute requires an offer of reasonable alternative employment which is then followed by termination.

Should the employee be given a termination notice, followed by a recall to work through the notice period, the severance sum, at the very latest, will be due on the expiry of this working notice.

Notice of Civil Claim

It is to be noted that a civil claim seeking enforcement of the sums due under the Ontario statute requires notice to be given to the Ministry:

Civil proceedings not affected

8. (1)Subject to section 97, no civil remedy of an employee against his or her employer is affected by this Act. 2000, c. 41, s. 8 (1).

Notice

(2)  Where an employee commences a civil proceeding against his or her employer under this Act, notice of the proceeding shall be served on the Director on a form approved by the Director on or before the date the civil proceeding is set down for trial. 2000, c. 41, s. 8 (2).