If an employee is terminated, but then offered a job by the same employer, should she be required to take it as part of her duty to mitigate damages?
By Jeffrey R. Smith
When an employee is wrongfully dismissed, the efforts of the fired employee to find new work are usually examined and factored into what the employee gets as compensation.
An award for wrongful dismissal is meant to remedy damages the fired employee has suffered as a result of the dismissal. However, if the employee hasn’t made reasonable efforts to lessen those damages — known in legal circles as mitigation — she may not be awarded as much.
The concept of reasonable notice follows a similar principle. Reasonable notice is supposed to provide the employee with enough time and compensation to bridge the gap until the employee finds another, similar job. If the employee doesn’t try to look for a new job, it doesn’t mean the employer has to pay more — it’s the employee’s obligation to do her part to make the circumstances better.
Often, the extent to which a fired employee has tried to mitigate her losses is argued in wrongful dismissal cases, with the two sides having different opinions and the court or arbitrator ultimately deciding if reasonable efforts were made. But what is a reasonable effort?
Generally, the fired employee is allowed a certain period to absorb the shock of losing her job and take some time to recover but, before too long, job hunting should begin. Whether it’s going to employment centres, applying for various positions or calling potential employers, an employee claiming damages has to prove she’s doing what she can to minimize her period of unemployment. Factors such as the economy, the type of work and the employee’s age are factored into what constitutes reasonable mitigation efforts.
Usually, a fired employee isn’t very happy with the employer who fired her. But what if the employer offers the individual re-employment, either at the same position or a different one? Should the employee be expected to mitigate her losses by accepting the job?
A few years ago, the Supreme Court of Canada made a decision that has had some ramifications for mitigation for fired employees. In Evans v. Teamsters Local Union No. 31, Canada’s top court ruled an employee should have mitigated his damages by accepting re-employment for his 24-month notice period, following a disagreement over his severance package.
The court said that, unless the employment relationship was damaged beyond repair and the employee faced a poisoned work environment, accepting a return-to-work offer was a reasonable effort to mitigate damages. Refusal to accept would be a failure to mitigate, said the court.
Recently, the Ontario Superior Court of Justice reached a similar decision. The court found an automotive service centre manager was wrongfully dismissed when his employer tried to lay him off due to poor financial results at his service centre. However, the company offered him his job back when it realized its mistake. But the fired manager refused. There was no evidence there was a poisoned work environment, so the manager didn’t make reasonable efforts to mitigate his losses by accepting the job, said the court.
Several other cases over the past few years have shown an expectation that, unless there are particularly bad circumstances, an employee should accept an offer of re-employment with her old employer if she can’t find other work.
But is this a good idea? Should an employee be expected to jump back into work with an employer who just wrongfully dismissed her, even if the employer is trying to right the wrong? Is it a good strategy for the employer to make the offer and potentially avoid damages, considering the employee may have bad feelings and might not be as productive or cause negativity in the workplace?
Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. He can be reached at [email protected] or visit www.employmentlawtoday.com for more information.
