In a recent case, the Ontario Superior Court found an employee failed to mitigate damages when he refused a return-to-work offer from his employer, with whom he had a good working relationship.

In the case, Gent v. Strone Inc., the plaintiff, David Gent, had been employed for 23 years by Strone Inc., first as a carpenter and then as a health and training specialist. On Oct. 17, 2015, Gent’s manager told him he’d be temporarily laid off due to a decrease in Strone’s business. He was also told he’d be recalled back to work as soon as business improved. Shortly after receiving the layoff notice, Gent notified his employer of two days during the next week when he’d be available to be recalled to work.

Read: Employers given mixed messages on termination clauses in employment contracts

On Oct. 27, 2015, Gent’s lawyer sent Strone a letter stating Gent now considered his temporary layoff to be a constructive dismissal. The employer replied there was a possibility Gent would be recalled to work and said it would update him in the near future. The lawyer immediately replied to Strone advising that Gent felt the employment relationship had broken down and he wouldn’t return to work if recalled. On Nov. 10, 2015, Gent received a letter recalling him to work, but he refused to return.

Gent sued his former employer for constructive dismissal, alleging there was no term in his employment agreement giving Strone the right to temporarily lay him off and noting he didn’t consent to the layoff. The company argued that Gent notified his employer of his availability for recall after being laid off and implicitly agreed to the layoff.

Read: Court confirms employer’s right to change job conditions 

In its decision, the court agreed with the employee. It also rejected the employer’s argument that Gent consented to the layoff when he initially notified Strone of his availability for recall, finding this was insufficient evidence to conclude he was agreeing to change a significant term of employment that would allow Strone to put him on temporary layoff. As a result, the court held that Gent was constructively dismissed from his employment when he was laid off.

The court then turned to Strone’s alternative argument, that Gent failed to mitigate his damages when he refused to return to work when he was recalled. The court reviewed the relevant case law and noted where an employer offers an employee a chance to mitigate damages by returning to work, the central issue is whether a reasonable person would accept such an opportunity.

The court stated the test was an objective one, and didn’t depend on the subjective views of the employee. Where the working conditions aren’t substantially different or the work demeaning, and where the personal relationships involved aren’t acrimonious, the employee is required to mitigate their damages by returning to work.

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Applying the test in this case, the court found a reasonably objective individual in Gent’s circumstances “would not have concluded that returning to work would be too embarrassing, humiliating or degrading.” It noted Gent gave no evidence as to how or why he’d be humiliated, embarrassed or degraded by returning to work. Instead, the court concluded the evidence established the employee had no intention to return to work after he was laid off.

As a result, it rejected most of Gent’s claim for damages, awarding damages for his losses between the date of layoff and the date he was recalled to work.

This case serves as an important reminder to employers that absent of an express term of employment that provides the employer the right to layoff an employee, even a temporary layoff can result in a constructive dismissal. However, where a layoff results in a constructive dismissal, the employee will be required to mitigate their damages and this may require returning to work for their former employer.

Read: Court decision warns employers about financial liability in mass terminations

Thomas Agnew is a partner at Hicks Morley, advising public and private sector employers on a wide range of human resources issues. These are the views of the author and not necessarily those of Benefits Canada.
Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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