In its 2008 decision in Evans v. Teamsters Local Union No. 31, the Supreme Court of Canada confirmed the duty of an employee claiming wrongful dismissal to mitigate his damages by accepting a job offer made by the same employer who originally dismissed the employee.  Does Evans apply in a situation where an employer sells its business and the purchaser offers an employee a job on the same or similar terms and conditions?  The answer, according to the British Columbia Court of Appeal, is “yes”.

In a recent decision in Silva v. Leippi, 2011 BCCA 495, the plaintiff, Silva, had worked for 4 years as an employee in a small vehicle repair and salvage business owned by the defendants, the Leippis.  When the Leippis entered into negotiations to sell their business, the purchasers offered to continue to employ the plaintiff on essentially the same terms of employment.  Rather than accept the purchasers’ offer, the plaintiff wrote to the purchasers and asked for a more favourable compensation arrangement, namely a 33% increase in pay.  Upon learning that the plaintiff had rejected the purchasers’ offer, the Leippis terminated his employment on a without cause basis and did not provide him with any statutory or common law notice or pay in lieu thereof.

The Court of Appeal approved of the trial judge’s determination that the plaintiff had received a proper offer of employment from the purchasers, which the plaintiff subsequently rejected when he deliberately attempted to “extract more favourable terms” from the purchasers. 

The Court rejected the plaintiff’s contention that the trial judge had applied the wrong mitigation test, namely Evans v. Teamsters, which concerned an employee who was offered a job by the same employer who originally dismissed him, instead of an older B.C. Court of Appeal decision which dealt with an employee who was offered a job by a different employer.  The Court confirmed that “the correct test for determining whether a dismissed person acted reasonably to mitigate his loss is the one set out in Evans”, noting that the Supreme Court of Canada in Evans v. Teamsters stated that a reasonable person should be expected to take available employment where the salary offered is the same, where working conditions are not substantially different, and where there are no acrimonious relations, all of which applied in this case.

Finally, the Court upheld the trial judge’s dismissal of the plaintiff’s claim for wrongful dismissal damages, approving of the lower court’s determination that the plaintiff had failed to mitigate his damages and acted unreasonably in refusing the job offer made to him by the purchasers and counter-proposing an arrangement more beneficial to himself.

The Court of Appeal approved of the trial judge’s determination that the plaintiff had received a proper offer of employment from the purchasers, which the plaintiff subsequently rejected when he deliberately attempted to “extract more favourable terms” from the purchasers.

The Court rejected the plaintiff’s contention that the trial judge had applied the wrong mitigation test, namely Evans v. Teamsters, which concerned an employee who was offered a job by the same employer who originally dismissed him, instead of an older B.C. Court of Appeal decision which dealt with an employee who was offered a job by a different employer. The Court confirmed that “the correct test for determining whether a dismissed person acted reasonably to mitigate his loss is the one set out in Evans”, noting that the Supreme Court of Canada in Evans v. Teamsters stated that a reasonable person should be expected to take available employment where the salary offered is the same, where working conditions are not substantially different, and where there are no acrimonious relations, all of which applied in this case.

Finally, the Court upheld the trial judge’s dismissal of the plaintiff’s claim for wrongful dismissal damages, approving of the lower court’s determination that the plaintiff had failed to mitigate his damages and acted unreasonably in refusing the job offer made to him by the purchasers and counter-proposing an arrangement more beneficial to himself.