Being dismissed or laid off can be a stressful experience, especially during a pandemic, where many areas of “normal living” have become uncertain.
Employees who have been wrongfully or constructively dismissed, including those who have been laid off, have a duty to mitigate. This duty consists of taking reasonable steps to find comparable employment to reduce their losses. Employees who fail to mitigate may find their entitlement to damages drastically reduced.
This article examines Gent v. Strone Inc., 2019 ONSC 155 (“Gent”), where the Ontario Superior Court of Justice held that despite an employee’s constructive dismissal by way of layoff, the employee’s refusal to return to work following a recall notice constituted a failure to mitigate.
Facts of the Case
Mr. Gent, the employee, worked with Strone Inc., the employer, for 23 years. In 2015, the employer temporarily laid off Mr. Gent due to a decrease in business, informing him that he would be recalled to work as soon as business improved.
One month later, the employer recalled Mr. Gent, who refused to return to work due to “humiliation”, and made a claim for constructive dismissal. The employer denied the constructive dismissal, but stated that even had Mr. Gent been constructively dismissed, he failed to mitigate his damages by refusing to return to work.
The Ontario Superior Court of Justice found that Mr. Gent was constructively dismissed. Given the employment agreement, the employer had no right to temporarily lay him off.
However, the Court also held that the employee failed to mitigate his damages when he refused the employer’s recall to work.
As a result, the employee was only awarded damages of $4,846.50 for notice period of 3.5 weeks. The Court determined the employee had been unreasonable and provided no evidence of his humiliation to justify his refusal to return to work.
Had the employee mitigated, he could have received a notice period of 18 months.
Depending on what is agreed upon or whether an employment agreement is valid, some temporary layoffs may be illegal.
Regardless of whether a layoff may be illegal or whether a dismissal is wrongful, an employee’s duty to mitigate remains.
With respect to layoffs, an employee is expected to return to work as long as a reasonable person would not have found it excessively embarrassing, humiliating, and/or degrading to do so. Factors that may be considered include the work atmosphere, stigma, loss of dignity, as well as the nature and conditions of employment. However, a temporary layoff alone is unlikely sufficient to dispose of an employee’s duty to mitigate.
Such a failure to mitigate can cost employees a great deal in terms of damages they would have otherwise been entitled to.
Employers and employees should consult a legal professional to ensure they understand their rights and obligations, to avoid opening themselves up to liability or losing their entitlements altogether.
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If you are an employer, planning a dismissal or layoff, or an employee who has been dismissed or laid off, our team of experienced employment and human rights lawyers can help. Contact us at 1 (800) 771-7882, or email firstname.lastname@example.org and we would be happy to assist.
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