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A Dismissal By Any Other Name

The distinction, or lack thereof, between wrongful dismissals and constructive dismissals is one which has challenged courts, lawyers, and judges. So debatable are the differences that the Supreme Court of Canada has recently seen fit to weigh in on this subject.
 
The case involved a union business agent, Evans, who had been employed by the Teamsters union for over 23 years. During an election for a new union executive, Evans supported the incumbent, who was defeated.
 
After the election of a new union executive, Evans was notified, in writing, that his employment would be ending. It appears that Evans ceased active duties at that point but he was kept on the union’s payroll. 
 
Evans, through his lawyer, took the position that he was entitled to 24 months of notice and that it would be acceptable to him if it was provided in the form of 12 months of working notice and 12 months’ pay. There was a series of unsuccessful negotiations at the conclusion of which the Teamsters union demanded that Evans return to work to serve out a 24 month notice period. 
 
In Evans’ view, he had never been given 24 months’ notice of termination, so he refused the directive to return to work. As a result, the Teamsters union adopted the position that Evans was (by declining to return to work) failing to properly mitigate his loss resulting from the termination of his employment. Evans sued for wrongful dismissal and the case worked its way up through the courts and eventually arrived on the doorstep of the Supreme Court of Canada. 
 
In the context of assessing a terminated employee’s duty to mitigate the loss resulting from a termination of employment, the Court stated that the same principles are to be applied to both wrongfully dismissed and constructively dismissed employees. The key element is that in both situations the employer has ended the employment contract without reasonable notice. The purpose behind recognizing constructive dismissals is to acknowledge that when an employer unilaterally imposes substantive changes to an employment contract, the employee has the right to treat the imposition of those changes as a termination. 
 
Such a “constructive” termination is every bit as real as if the employee were actually informed of the dismissal and is, accordingly, accompanied by the same right to claim for damages in lieu of notice. The Court went on to find that, given that both wrongful and constructive dismissals are characterized by employer-imposed terminations of the employment contract, there is no principled reason to distinguish between them when evaluating the need to mitigate.
 
When the employer offers the employee a chance to mitigate damages by returning to work for the employer, the issue is whether a reasonable person would accept such an opportunity. The critical element in determining what is reasonable is that an employee is not obliged to mitigate by working in an atmosphere of hostility, embarrassment, or humiliation.
 
Although Evans claimed numerous reasons why it would not be reasonable for him to return to work for the Teamsters union (including his allegation that he had been “treated like a dog”), the Court disagreed. It found no real evidence of acrimony and no evidence that Evans would have been unable to continue to perform his duties if he resumed his employment. The relationship was not sufficiently damaged that it could be said a reasonable person, in Evans’ position, would not have resumed his duties.
 
This case should not be taken, necessarily, as blanket authority that an employer which is unable to negotiate a settlement with a terminated employee may simply recall the employee to work. In Evans’ case, that strategy worked for his employer but in my view it will be a rare instance when an employer will get away with that maneuver.
 
 
Robert Smithson is a partner at Pushor Mitchell LLP in Kelowna practicing exclusively in the area of labour and employment law. For more information about his practice, log on to http://www.pushormitchell.com/.