Offering dismissed employee job back

Trying to fix things after lawsuit is launched

Brian Johnston

Question: If an employer offers a terminated employee her job back after the employee files a wrongful dismissal lawsuit, is that a reasonable way to resolve the matter?

Answer: It may be, but it’s a long shot. If the employee wants to return, then it’s easy. But if the employee is not keen to return, it is questionable as to whether the non-acceptance of the offer would be a failure to mitigate.

An employee’s duty to mitigate was considered in Evans v. Teamsters Union No 31. In that case, an employee worked in a union office for more than 23 years and was dismissed without cause. The employee said that he was entitled to 24 months reasonable notice. There was an exchange of correspondence between the lawyers. No lawsuit was commenced. The union continued to pay the employee his salary and benefits.

The union then sent a letter requesting that he return to his employment to serve the balance of his notice period. The employee replied that he would return to work, provided that the union immediately withdrew its termination letter, which the union was not prepared to do. As a result, the employee brought an action for damages for wrongful dismissal.

The trial judge ruled that the union had not shown that the employee had failed to mitigate damages by refusing to return to the workplace from which he was fired. The union successfully appealed. The Court of Appeal held that the employee had failed to act reasonably with respect to the job offer, and that this was a failure to mitigate damages. The employee appealed to the Supreme Court of Canada (SCC), which dismissed the appeal.

The SCC held that a reasonable person would have viewed the employment offer as a bona fide employment opportunity; the relationship between the employee and the employer was not seriously damaged and, since the employment terms were the same, it was not unreasonable for him to return to work.

In other words, a reasonable person is expected to take available employment if the working conditions are not substantially changed, the salary is the same, and if the relationship between the employee and employer is not damaged. However, a fundamentally changed set of employment terms in a now-toxic work environment would be too much. As stated in Evans, “the critical element is that an employee not be obliged to mitigate by working in an atmosphere of hostility, embarrassment or humiliation.”

Recognizing that it is likely that time has passed between the termination, the commencement of the wrongful dismissal lawsuit, and the offer to return to work, a court could rule that the employee was not obliged to return and the employee’s failure to do so did not constitute a failure to mitigate.

Having said that, it may be that the employee is perfectly happy to return to the former job and the employer can make sufficient amends for the dismissal that the employee will be satisfied with. Sometimes it happens that lower-level management, for example, dismiss an employee and senior management decides that it was not a good idea to expose the organization to significant liability. The senior management will then seek to reset the clock by reinstating the employee. It is tricky, but it can be done. However, it will be questionable as to whether the employer can say that the failure to accept the old job back is in breach of an employee’s duty to mitigate.

For more information see:

Evans v. Teamsters, Local 31, 2008 SCC 20 (S.C.C.).

Brian Johnston, Q.C., is a partner with Stewart McKelvey in Halifax. He can be reached at (902) 420-3374 or [email protected]

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