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Supreme Court: May be necessary for dismissed employees to return to the same employer to satisfy duty to mitigate

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According to the Supreme Court of Canada, it may be necessary for a dismissed employee to mitigate his or her damages by returning to work for the same employer.

In a case released just yesterday, the Supreme Court of Canada has added a new and interesting element to the mix of termination options for employers.  The case, Evans v. Teamsters Local Union No. 31 2008 SCC 20, involved a business agent who had been employed by the Union for 23 years.  After receiving notice that his job had ended, he, through his lawyer, attempted to negotiate a severance package with the union’s lawyer.  When negotiations failed, the union advised him that he was expected to return to work to work out a 24 month notice period.  When he refused to do, the union claimed that he was not entitled to notice because he had failed to mitigate his damages by not returning to work.

While the employee was successful at trial, arguing that it would have been too difficult for him personally to return to the job, the decision was overturned on Appeal, and this was supported by the Supreme Court.

In reaching this decision, the Court took what it called a “multi-factored and contextual analysis” which included considering the fact that there was no other employment available to Evans at the time, and that viewed objectively, Evans would not have been working in an atmosphere of “hostility, embarrassment or humiliation”.  On these facts, and the Court stressed that these cases will always revolve around the facts, a reasonable person would and should have accepted the opportunity to work out the notice period.  Moreover, the Court stated that in considering whether an employee has failed to mitigate by not staying or returning to the dismissed position, there was no distinction between an employee who has been constructively dismissed or one who has been dismissed outright.

Finally, the Court has also “parenthetically noted” that Wallace damages are not subject to mitigation.  This clarifies some uncertainty in the case law across the country about this issue.

Janice Rubin