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Dismissed Employees Must Give Serious Consideration to Offers of Re-employment

Posted On: January, 23 2015

Employees who are terminated or constructively dismissed by their employers must give serious consideration to offers of re-employment following termination. This was illustrated in a recent case from the Ontario Court of Appeal, Chevalier v. Active Tire & Auto Centre Inc., 2013 ONCA 548, where the Court held that the dismissed employee was not entitled to severance pay, as he had not mitigated his damages by accepting his employer’s reasonable offer of re-employment following his dismissal.

 

Earl Chevalier had been an employee and later manager of an automotive and tire centre in Niagara Falls for 33 years when he was constructively dismissed from his employment in October 2008.  Mr. Chevalier was constructively dismissed when his employer placed him on a “lay off” due to the poor financial performance of the Niagara auto business.  In law, this amounted to a termination, as employers are not entitled to lay off their employee unless the employment contract contains express provisions permitting a lay off.

A few weeks after his termination, Mr. Chevalier commenced a wrongful dismissal suit against his employer.  Five days after the action was commenced, Active Tire recalled Mr. Chevalier to work, back to his previous position, with the same responsibilities and duties, and at the same level of compensation.

Mr. Chevalier declined the offer of re-employment and proceeded with his wrongful dismissal suit.  At trial, Mr. Chevalier argued that he wasn’t required to mitigate his damages by returning to work because he had faced harassment and intimidation in the workplace prior to his lay off, because it would be embarrassing and humiliating for him, and because of the acrimony caused by the litigation process.

The trial judge disagreed, and held that, viewed objectively, Mr. Chevalier should have accepted the opportunity to return to work.  By declining this opportunity, Mr. Chevalier had failed to mitigate his damages, “with the result that his damages in lieu of notice were nil.”  In conclusion, the trial judge dismissed Mr. Chevalier’s action for wrongful dismissal damages and ordered Mr. Chevalier to pay $50,000 in legal fees to his former employer.

Mr. Chevalier appealed the trial decision to the Ontario Court of Appeal, arguing that the judge had got it wrong, and that he had experienced demeaning and humiliating conduct by his employer and that it was reasonable for him to reject the offer of re-employment.  On appeal, the Court agreed with the trial judge that Mr. Chevalier acted unreasonably by rejecting Active Tire’s offer of re-employment.  The Ontario Court of Appeal’s decision, which was released in September 2013, commented that while the result was unfortunate for Mr. Chevalier, the trial judge’s decision did not contain any errors and was supported by the factual record.

The Chevalier decision confirms that dismissed employees must give serious consideration to offers of re-employment following dismissal.

 

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