Mitigation: Offer to Return to Work: Evans: Supreme Court of Canada

Evans – SCC Majority

The reasons for the majority decision were delivered by Bastarache J., Abella J. dissenting.

The majority concluded that the issues in a constructive dismissal and direct dismissal as to the employee remaining employed by the employer were, in principle, the same.

The Court determined that in certain circumstances, it will be necessary for the dismissed employee to return to work. This being said, it remains the employer’s onus to show a failure to mitigate in this circumstance.

As noted, the Court referenced the Ontario Court of Appeal decision in Mifsud v MacMillan Bathurst:

Where the salary offered is the same, where the working conditions are not substantially different or the work demeaning, and where the personal relationships are not acrimonious.

The Supreme Court also referenced the British Columbia Court of Appeal decision of Cox v Robertson which had held that other relevant factors included whether or not litigation had been commenced and whether the employee remained actively employed. In the latter case, the B.C. Court of Appeal had reversed the trial judge and found no obligation to return to the employment, mainly due to the commencement of litigation.

As an aside, the plaintiff in Cox had worked 18 years as a dental assistant and was initially given 30 days working notice on September 15, 1997. Counsel wrote to the dentist employer on October 15. She was then paid the statutory minimum. She sued December 8, including a Wallace extension claim. She was offered resumed employment until she found a new position on January 8.

This digression aside, the Court noted that the analysis is contextual and multi-factored. The critical issue is that the employee not be obliged to mitigate by working in “an atmosphere of hostility, embarrassment or humiliation”, a standard which is to be reviewed objectively. This being stated, the non-tangible elements including “work atmosphere, stigma and loss of dignity” in addition to the tangible elements are to be included in the evaluation.

The Court predicted that those persons dismissed due to organizational or structural alterations where there were no personal issues involved would be more likely to be required to remain employed.

In essence, the Court was looking at this as a clinically sterile decision effected in good faith, although these words are not specifically stated. Apparently no one on the Supreme Court had read any of the Mifsud case law referenced above, which abundantly reflects the controversy and hostility which has historically arise from a constructive dismissal.

Although now academic for the most part, the Court noted that Wallace extension damages would not be subject to a mitigation obligation. How and why an employee who has been terminated in bad faith would even remotely be expected to return to employment remains a mystery.

Critically the majority noted the following:

1. Evans was always prepared to resume employment through the course of negotiations and did not raise the alleged concerns contemporaneously.

2. There was no realistic work alternatives available for Evans in Whitehorse.

3. There was no acrimony shown between Evans and Hennessy. ¹

These are important conclusions which may impact future interpretations.

Evans SCC – The Dissent

Curiously, the majority made not one token reference to the principles of interpretation espoused by Machtinger, Wallace, McKinley and the line of cases cited in these decisions, a point well noted in the dissent of Abella, J.:

[93] This Court has recognized employment contracts as a unique subset of contracts marked by an inherent imbalance of bargaining power, making the wholesale, uncritical acceptance of principles from contract law inappropriate (Wallace v. United Grain Growers Ltd., 1997 CanLII 332 (SCC), [1997] 3 S.C.R. 701; Machtinger v. HOJ Industries Ltd., 1992 CanLII 102 (SCC), [1992] 1 S.C.R. 986).  The uniqueness of employment contracts was well explained by Professor Judy Fudge as follows:

Both the nature of the employment relationship, that is, the rights and duties that define it, and the nature of the commodity sold, which is the human capacity to work, create pressures that are hard to contain within the conceptual boundaries of contract. Historically, the employment contract emerged out of, and was infused with, master and servant law. Employment is an asymmetrical relationship in which the employee implicitly cedes authority to the employer. Inequality is not just a question of bargaining power; it is an essential institutional feature of employment that the employer has a unilateral and residual right of control and the employee has an open-ended duty of obedience. Moreover, concepts of contract law must accommodate the distinctive object of the exchange in employment — the capacity of human beings to labour. In a liberal society, human beings are to be treated with dignity and respect. The employee is both the subject and object of the employment contract, with the result that the employment relationship helps to define an individual employee’s self-worth.

(Judy Fudge, “The Limits of Good Faith in the Contract of Employment: From Addis to Vorvis to Wallace and Back Again?” (2007), 32 Queen’s L.J. 529, at p. 530)

The dissent continued to make reference again to the words of Iacobucci J. in Wallace v United Grain Growers:

[94] Because of the inherent imbalance in bargaining power, the central role that work plays in the individual’s sense of identity, and the recognition that “[t]he point at which the employment relationship ruptures is the time when the employee is most vulnerable and hence, most in need of protection”, this Court has sought to “encourage conduct that minimizes the damage and dislocation (both economic and personal)” inherent in the termination of employment (Wallace, per Iacobucci J., at para. 95).

It is difficult to conceive of a reason why the majority decision would not somehow reference, if even to distinguish, the strong policy sentiments of the Supreme Court expressed in a multitude of its decisions from 1989 forward.

Abella, J. referenced with approval the passage from David Harris’ text on Wrongful Dismissal:

[107]     But even if one can assert that a wrongfully dismissed employee’s duty to mitigate may include returning to the workplace, I agree with Gower J. (and the existing jurisprudence) that it would only be in “the rare case” that such an expectation would be reasonable (para. 93).  The rarity of expecting a dismissed employee to mitigate damages in the same workplace is already well recognized in the case of constructive dismissals.  The reason such an expectation should remain a remote and exceptional possibility is explained by David Harris in his text Wrongful Dismissal (loose-leaf), vol. 2:

Surely the employee should not be kept on the employer’s strings, having to respond at the slightest whim of the same company that deliberately rejected him by the act of dismissal. [p. 4-292.2]

This opinion also cited a passage from Waddams stating in effect that the tie goes to the runner: “In case of doubt, the plaintiff will usually receive the benefit, because it does not lie in the mouth of the defendant to be over-critical of good faith attempts by the plaintiff to avoid difficulty caused by the defendant’s wrong” (par 99)

The dissent is powerful, logical and entirely correct.

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1. Evans