A recent decision reaffirms that employees must return to work following a constructive dismissal to mitigate their damages where doing so would not be embarrassing, humiliating or degrading. In Gent v Strone Inc (2019 ONSC 155) the court found that an employee should have returned to work in mitigation after a constructive dismissal.
The employee was a 53-year-old health and safety training specialist. He had been employed by the employer for approximately 22.5 years.
In 2014 the employer had a significant decrease in its business. The decrease resulted in a number of layoffs, including 22 permanent layoffs and three temporary layoffs.
On 15 October 2015 the employee was temporarily laid off. At this time, the employee was told that he would be recalled as soon as possible when business improved. This was communicated through an in-person meeting and was explained in the layoff letter. The employer maintained the employee's benefits during the layoff period and asked him keep it informed of his availability and contact information so that he could be recalled as soon as possible. However, the employee was asked to return all of the company's equipment, including the company car.
Shortly after his layoff, the employee retained a lawyer and through his lawyer told the employer that he considered himself to be constructively dismissed.
The employer responded to the employee and explained that he might be recalled to work and that the company would update him on 9 November 2015. The employee responded to the company through his lawyer and claimed that the relationship had broken down and that he would not return to work.
On 10 November 2015 the company recalled the employee to work on substantially the same terms and conditions of employment. The employee refused.
In a motion for summary judgment, the court found that the employee had been constructively dismissed when he was temporarily laid off. This was because the employee's employment contract did not give the employer the right to temporarily lay him off and he did not consent to the layoff.
However, the court sided with the employer in finding that the employee should have returned to work.
The court confirmed that the test to determine whether the employee should have returned to work was "whether a reasonably objective individual in his circumstances would not have concluded that returning to work would be too embarrassing, humiliating and/or degrading".
The court noted that the recall letter provided to the employee addressed the issues that may have been of concern to the employee – for example, the letter:
- provided a return to work date but gave the employee the opportunity to discuss an alternative date;
- stated that the employer had no hard feelings or ill will towards the employee and that he was considered a valuable employee;
- stated that the employee would suffer no reprisals for returning to work;
- acknowledged that the employee was not admitting that future layoffs were permissible; and
- invited the employee to contact the company to discuss any questions.
The court found that a reasonably objective individual in the employee's circumstances would not have concluded that returning to work would be too embarrassing, humiliating or degrading. Further, the employee had given no evidence of how or why a return to work would be embarrassing, humiliating or degrading.
The court also rejected the employee's argument that because he had already commenced litigation against the employer when the recall offer was made, he need not return to work. The court noted that although that is a factor to consider, it is not determinative and does not preclude a finding that the employee should return to work.
Because the employee had failed to mitigate by returning to work, he was entitled only to damages for the short period between his layoff date and recall date (a total of approximately C$4,800).
This case confirms that employees must mitigate their damages, which may include continuing to work for their employer even when they believe that they have been constructively dismissed, particularly in a layoff scenario.
Further, even if an employee has started litigation against an employer, it is not too late to offer the employee their job back.
Employers should consider whether it is appropriate to re-offer an employee the opportunity to return to work following an allegation of constructive dismissal as it can greatly limit the damages and potential liability in litigation.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.