BC court affirms that fired employees have obligation to accept reasonable offer
A wrongfully dismissed employee has a duty to take reasonable steps to limit the scope of the loss and damage resulting from their dismissal. This may include searching for new employment opportunities and accepting offers of employment, none of which is particularly controversial.
But what about when an offer of employment is made by the employer who terminated the employee? Is the employee required to return to work for the same employer in mitigation of their damages, or can the employee decline the opportunity to do so? This was one of the issues before the Supreme Court of British Columbia in the recent decision in Blomme v. Princeton Standard Pellet Corporation.
In this decision, the court found that the plaintiff employee acted unreasonably by declining the opportunity to return to work after her employment was terminated by operation of law; specifically, as a result of the temporary layoff provisions in the BC Employment Standards Act (ESA). As a result of her failure to mitigate, the employee’s claim was dismissed in its entirety.
An employer had no legal right to temporarily lay off a 23-year worker, but an offer of re-employment was reasonable that reduced the damages owing, an Ontario court ruled.
Factual summary
The employee was employed by the defendant, Standard Pellet Corporation, as a plant supervisor. Due to the impacts of the COVID-19 pandemic, the employee and some of her colleagues were placed on a temporary layoff. However, the employee remained on temporary layoff longer than is permitted by the ESA, even as amended during the pandemic. As a result, her employment was deemed terminated by operation of the ESA on Aug. 30, 2020, which was the maximum period she could have remained on a temporary layoff. At the time of the deemed termination, she was 67 years old and had been employed by Standard Pellet for over 20 years.
On Oct. 1, the employee sent a demand letter through her legal counsel asserting for the first time that she had been terminated on Aug. 30. The employer was not intending to terminate the employee’s employment and did not realize until sometime after receiving the demand letter that a termination had even occurred.
After realizing its error, Standard Pellet followed up with the employee several times to arrange for her return to work. The employee did not respond to those communications, so the employer subsequently followed up through its legal counsel acknowledging that it owed the employee eight weeks’ pay in lieu of notice due to the deemed termination, and repeating the offer for her to return to work. The employee did not respond or explore the option of returning to work, instead pursuing a claim for wrongful dismissal seeking damages representing her compensation over a 24-month notice period.
A worker was entitled to refuse an offer of re-employment that didn’t address wages lost from a wrongful dismissal, the BC Court ruled.
Legal analysis – duty to mitigate
The court revisited the seminal case from the Supreme Court of Canada, Evans v. Teamsters Local Union No. 31, 2008 SCC 20. In Evans, the top court held that when an employer offers the employee the opportunity to return to work, the key question is whether a reasonable person would accept that opportunity viewed in context and from an objective standard. Evans also established that employees will not be obliged to mitigate in an atmosphere of hostility, embarrassment or humiliation. In Blomme, the court noted that Evans and the cases relied on by the employee arose in the context of a regular termination by the employer rather than a temporary layoff. The more appropriate comparables were cases in which the reasonableness of accepting an offer to return was considered in the context of a temporary layoff.
The court went on to find that there were no conditions that would render the employee’s return to work objectively unreasonable in this case. The employee was one of many employees laid off due to the COVID-19 pandemic; the layoff was implemented in good faith; there were legitimate business reasons for the order of recall; the termination occurred by operation of law in circumstances where the employer had no intention of actually terminating the employment relationship; and the offer to return was made in good faith on the same terms and conditions; the employee would have been made whole; and there were seemingly few comparable employment opportunities available. Importantly, there was also no evidence to support that the employee would have been returning to an atmosphere of hostility, embarrassment or humiliation in the circumstances, said the court.
As a result, the court concluded that the employee was required to mitigate her damages by returning to work for Standard Pellet. Had she done so, she would have suffered no loss at all. Due to her failure to mitigate, the employee’s claim was dismissed.
An offer of re-employment that was vague on recognizing a worker’s long-term services was insufficient to avoid damages.
Lessons for employers and employees
Mitigation can completely change the trajectory of a wrongful dismissal claim. In this case, a wrongful dismissal claim seeking damages over a 24-month notice period was dismissed entirely due to the plaintiff’s failure to accept a reasonable mitigation opportunity.
Blomme reaffirms that, in some cases, the duty to mitigate will require that an employee accept an offer to return to work with the employer who terminated their employment.
Although no employee is obligated to work somewhere they no longer wish to work, dismissed employees pursuing wrongful dismissal claims need to appreciate how the duty to mitigate may impact their claim. Declining a reasonable employment opportunity - even one from their prior employer - may compromise an employee’s claim for damages and materially change whether it is worthwhile to proceed to trial. In this case, the defendant employer did not pursue its costs. Had the defendant decided otherwise, the plaintiff may have been ordered to pay the employer’s costs for the proceeding - which included a four-day trial - on top of having her claim dismissed.
From an employer’s perspective, this case underscores the value of a mitigation defence. It further highlights that a timely, reasonable and good-faith offer to return to work can be a very effective risk management strategy, especially in circumstances where the termination occurs by operation of law.
Nicole Toye is a partner focusing on employment law and litigation at Harris and Company in Vancouver.
