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You're Fired - But Don't Leave!

One of the stranger aspects of the law of wrongful dismissal is the extent to which the duty to mitigate may compel a fired employee to return to work for the firing employer. Notwithstanding that this may be an uncomfortable arrangement for the terminated employee, it seems that the courts (in B.C. at least) are embracing this concept.
 
An employee suing a former employer for damages for wrongful dismissal has a legal obligation to mitigate his or her losses. The employee can satisfy this duty by making reasonable efforts to find other employment (or to otherwise generate earnings to replace the lost wages).
 
This duty to mitigate arises out of the law of contract - flowing from that body of law is the premise that the innocent victim of a contractual breach must take steps to reduce his losses. In the employment context, this means the terminated employee must make attempts to obtain new employment.
 
So, individuals claiming damages for wrongful dismissal must make reasonably diligent efforts to find new employment. If they do not do so, this failure to mitigate will negatively impact their entitlement to pay in lieu of notice. 
 
Occasionally, the terminating employer will make an offer of another position or will demand that the employee return to work temporarily. This presents a difficult decision for the terminated employee, and his or her entire claim for damages may ride on the outcome.
 
One high-profile decision involved a long-serving employee of the Teamsters Union in the Yukon. Evans had been employed for over 23 years as a business agent in the Teamsters’ Yellowknife office.
 
Evans’ employment was brought to an end but the parties were unable to agree on a suitable severance arrangement.   The Teamsters demanded that Evans return to work for a period of two years but he refused to do so.
 
The B.C. court focused on whether it was reasonable for Evans to have rejected the Teamsters’ offer of two years working notice. The court concluded that the Teamsters had made a bona fide offer of continued employment for the exact job Evans had previously held and that Evans had failed to act reasonably with respect to that job offer.
 
Two more recent decisions out of the B.C. courts have demonstrated the degree to which this application of the duty to mitigate has found a home in this province.
 
In one, an employee named Silva had his employment terminated when his employer’s business was sold. The purchasers would have retained Silva on somewhat altered terms (though not altered to an extent that they would have amounted to a constructive dismissal) but Silva did not accept.
 
The B.C. Supreme Court determined that Silva suffered no damage that he could not have avoided by continuing to work for the purchasers on the terms offered. His claim was dismissed.
 
In another decision, an employee named Whiting worked for a company providing electronic payment processing services to a bank. Due to contractual issues between Whiting’s employer and the bank, Whiting’s employment came to an end.
 
The bank offered Whiting a position at the same salary plus bonus compensation, with recognition of past service, and other incentives. Whiting did not accept the offer, and sued his former employer for damages.
 
The B.C. Supreme Court found in favour of the former employer, stating that Whiting’s claim for damages for wrongful dismissal was “fatally flawed” as a result of his failure to accept the position. Although the position was offered by a business partner rather than by the former employer, the result for the employee was similar.
 
As time passes, employers will become accustomed to the courts’ view of such situations. When that happens, we can expect more terminations to be accompanied by a demand for the employee to keep on working for the employer (if only temporarily).
 
Robert Smithson is a lawyer in Kelowna practicing exclusively in the area of labour and employment law. For more information about his practice, or to view past “Legal Ease” columns, log onto www.pushormitchell.com.