Legal News

Constructive Dismissal Damages Reduced to Zero for Failure to Mitigate

An Ontario court has refused to award damages to an employee who was constructively dismissed because the employee refused to accept the employer’s offer to return to work.

The 55 year old employee had worked for the employer for 33 years. Two weeks after his employment was terminated, he commenced an action for wrongful dismissal. The employer promptly contacted him, explained that he should not have been terminated, and offered him his job back. The employee declined the offer.

The Ontario Superior Court decided that the employee had been terminated for economic reasons, and had not been mistreated during the termination process. As the employee did not face an atmosphere of hostility, embarrassment or humiliation in returning to work, the Court concluded that a reasonable person would have accepted the employer’s offer to return. As a result, despite being wrongfully dismissed, the Court found that the plaintiff was not entitled to any further damages.

This decision serves as a reminder that, where appropriate, an offer of continued employment may be used to reduce an employer’s liability for damages following dismissal, provided the return to work would not result in a humiliating or intolerable environment for the employee. Terminated employees must mitigate their damages by accepting suitable alternative employment, either with another employer, or with his or her former employer, in the right circumstances.

Chevalier v. Active Tire