Mitigation
This issue becomes more complicated in the context of the employer’s recall to work notice, on parallel terms and conditions and presumably absent any adverse or hostile working conditions.
The general theme of the cases is to consider the statutory lay-off as termination of employment and then apply Evans considerations to the offer of recall.
Should the mitigation be found, the issue will then arise as to the salary arrears from the termination date to the date of recall.
In this instance, the employer will be obliged to pay the salary arrears from the date of "termination" to the date of recall. 1
The issue that none of these cases raise is that, noting the finding of termination, the statutory payment is due on that date. This question is more significant in Ontario, given the application of the severance entitlement. For example, in Chevalier reviewed below, the statutory payments due on termination would have been 34 weeks. This issue is considered above.
Such were the facts before MacAdam J. of the Supreme Court of Nova Scotia in Damery v Matchless Inc., a 1996 decision well before the Supreme Court of Canada decision of Evans. The trial judge found that the plaintiff had no intent of returning to work with the same employer and found such conduct was a violation of his duty to mitigate. The damage claim was allowed, but only from the date of the lay-off to the date of the recall notice.
An argument may be made by the employee that an unqualified return to work in response to a recall notice is, in effect, implicitly agreeing to the employer’s right of lay-off, and hence vulnerable to the very same conduct in the future.
This seemed to be the implicit theory in the decision of Moore J. in Turner v Uniglobe in rejecting the employer’s submission to this argument of recall:
[72] When Turner received the October 30th “recall letter” on October 31st, there was no current lawsuit by Turner against the defendants. But Turner and the defendants knew that a lawsuit was imminent - - from Mr. Landry’s October 18th, 2001 letter.
[73] There was nothing in Beth Gardner’s October 30th, letter that guaranteed “during the next 12 months Uniglobe will not give you a layoff pursuant to sections 62, 63, and 64 or the Employment Standards Code. Therefore, please return to work to mitigate your damages.” Therefore, if Turner returned to work at Uniglobe without that guarantee, Turner would be taking a gamble.
[74] The defendants have the burden of proving Turner’s failure to mitigate, a burden not lightly discharged. Various cases cite Cheshire Fifoot Furmston’s, Law of Contract, 14th ed. (London: Butterworths Lexis Nexis, 2001) at 685:
But the burden which lies on the defendant of proving that the plaintiff has failed in his duty of mitigation is by no means a light one, for this is a case where a party already in breach of contract demands positive action from one who is often innocent of blame.
[75] The defendants have not proven that Turner did not mitigate her damages.
The Ontario Superior Court considered such a plea from the company in the decision of Chevalier v Active Tire. The plaintiff had been advised of his lay-off, only to be told a few days later that the company had mistakenly believed it had such a legal right. It then offered him his employment back on similar terms.
This offer was declined and was fatal to the plaintiff’s case as the trial judge found this to be a failure to mitigate, citing Evans as the authority for this conclusion. 2
The argument of implicitly accepting amended terms of employment was not advanced. The court concluded:
Considering the evidence a whole and the submissions of counsel, I have concluded that Active Tire has met the required onus of establishing that a reasonable person would have accepted the opportunity to return to work at the Niagara Falls location of Active Tire when the opportunity was provided to Mr. Chevalier. Therefore, he failed to take reasonable steps to mitigate his damages, with the result that his damages in lieu of notice would be nil. In particular, I find that accepting the opportunity to return to Active Tire would not have obliged Mr. Chevalier to work in an atmosphere of hostility, embarrassment or humiliation, the critical element identified in the Evans decision for determining what is reasonable.
As noted, there was no claim for the statutory payment which would have been considerable given the plaintiff's lengthy period of employment of 33 years.
A similar conclusion was reached by the B.C. Supreme Court in Besse v Dr. A. S. Machner. The decision reflects the context and that the ratio in many of such cases is very much fact driven. The court agreed that there was a failure to mitigate by not accepting the offer of re-employment and limited the damage claim from the date of the lay-off to the offer:
These are the circumstances surrounding the imposition of Mrs. Besse’s temporary lay-off:
- Dr. Machner’s dental practice was not operating at the level achieved by its previous owner;
- Dr. Machner’s actions were motivated solely by financial considerations;
- The temporary lay-off was imposed only after Dr. Machner, in good faith, engaged Mrs. Besse and the other receptionist in an effort to find a workable solution to his concerns; and
- Dr. Machner, by his legal counsel’s letter dated February 19, 2008, acknowledged his error in imposing the temporary lay-off, offered Mrs. Besse the opportunity to return to employment on the same terms as previously applied, and to make good on any loss of income sustained in the interim.
[91]The tone of written communication from Dr. Machner to Mrs. Besse was courteous and respectful throughout.
The British Columbia Court of Appeal considered this very issue in its August 2015 decision of Fredickson v Newtech Dental Laboratory. On the facts of this case, it determined that the employee had no obligation to return to work and in so doing, overturned the trial decision of Joyce J. to the opposite effect.
The plaintiff had taken a medical leave due to personal life issues, her entitlement to which had been disputed by the employer. Upon her return to work on July 20, 2011, after an absence of roughly three months, she was then advised that she had been laid off due to insufficient work.
A letter followed from her legal counsel on September 9, 2011 asserting that she had been dismissed in July. She was then directed, on September 23, 2011, to resume her employment as of September 26, 2011, failing which it was then asserted she would be in violation of her mitigation obligation.
The action was commenced on October 18, 2011. On October 19, 2011 before the employer was aware of this proceeding, it offered to re-employ her plus pay her wage arrears from July 20, 2011 to September 26, 2011.
Again on October 25, 2011 and November 4, 2011, the company offered to re-employ her on the same terms which offer was repeated on April 19, 2012.
In the course of the defence of the proceeding, Newtech pleaded that it had not dismissed the plaintiff in July. This assertion was not changed to an admission until final argument.
The trial judge accepted the mitigation plea and allowed for damages only from the date of the lay-off to the date of the offer of re-employment, September 23, 2011.
Two reasons put forward by the plaintiff for rejecting the offer were the employer’s conduct in surreptitiously recording two telephone conversations and a discussion between the company representative and a fellow employee in which he stated that the plaintiff would be too embarrassed to return to work.
The Court of Appeal concluded that the offers of return to work were not coupled with “make whole” compensatory payments as the offers of September 23 and 26, 2011 dealt only with the income loss to the date of the offer being extended. In any event, the court stated that she was entitled to full compensation for such period as she had been dismissed. A further factor in favour of the plaintiff’s argument was the employer’s failure to admit the dismissal. Further the trial judge, the court noted, failed to address the factor of current litigation between the parties.
The Court of Appeal also spoke to the need for the employer to respect the integrity of the employment relationship:
Independent of the above, I am of the view that the trial judge was clearly wrong in failing to reflect the mutuality of trust, in the context of this employment, inherent in the relationship between employer and employee. The pertinent question when mitigation is in issue was described by Justice Bastarache as whether “a reasonable person in the employee’s position would have accepted the employer’s offer”. To determine whether this is so, in my view requires a judge to consider the full nature of the employment relationship. This includes the obligations of good faith or fidelity on the part of both the employer and employee, consistent with the nature of the work and the workplace. Most frequently questions of good faith, fidelity and fair dealing are questions that arise in the context of allegations of cause for the employee’s dismissal. The integrity of the employment relationship goes further, however. Just as trust of an employee, in the circumstances of the employment, is an important aspect for the employer, so too trust of the employer is important.
In this case, the trust factor was seen to have been eroded by the employer’s recording and use of telephone conversations with the plaintiff and the above referenced discussion with a colleague of the plaintiff.