My name is Mark Goodfield. Welcome to The Blunt Bean Counter ™, a blog that shares my thoughts on income taxes, finance and the psychology of money. I am a Chartered Professional Accountant and a partner with a National Accounting Firm in Toronto. This blog is meant for everyone, but in particular for high net worth individuals and owners of private corporations. The views and opinions expressed in this blog are written solely in my personal capacity and cannot be attributed to the accounting firm with which I am affiliated. My posts are blunt, opinionated and even have a twist of humor/sarcasm. You've been warned. Please note the blog posts are time sensitive and subject to changes in legislation or law.

Monday, November 25, 2013

Employment Mitigation Issues - Does a Dismissed Employee Have to Return to Their Old Job if it is Offered Back?

As I have enough trouble writing about income tax and money, I have steered away from discussing employment issues on my blog, other than a rant about references and how they are A No Win Situation for Past and Future Employers and how people Waste References.

As most of us will be dismissed, fired or laid off at some point in our careers, I thought it would be interesting to have a series of posts on the mitigation of damages from both the employee and
employer's perspective. 

Since this topic is complex, I have enlisted the help of Marie-Hélène Mayer, an employment law specialist whom I have worked with over the years. In the first post of her two-part series, I think you will be shocked at how a recent court case expects employees to mitigate their damages in certain circumstances.

 

Termination and Return to Work: Ontario Court of Appeals Weighs in on Mitigation

By Marie-Hélène Mayer

One of the most frequent questions I get asked when providing advice to a newly terminated employee is how quickly he or she should be looking for a job. Employers are equally concerned with how quickly a terminated employee should be seeking replacement employment since they bear the entire financial burden of paying severance. Both employees and employers are often surprised to hear that an employee’s obligation to secure replacement employment (or as lawyers like to call it, “mitigate” their damages) is quite stringent and requires employees not only to take active steps to look for a new position, but may, in some instances, require the employee to consider going back to work for their former employer. This may sound counter-intuitive and impractical (it can be) but is happening with greater frequency.

Today, in the first part of a two-part series on mitigation, I discuss a recent decision of the Ontario Court of Appeal, Chevalier v. Active Tire & Auto Centre Inc. (“Chevalier”) 2013 ONCA 548, which confirms the principle that the law of mitigation, may in certain circumstances, require a terminated employee to accept an offer of re-employment from its previous employer. On Wednesday, in the second part of this series, I will examine an employee’s obligation to mitigate in the more conventional situation, where the employee is dismissed and not offered their job back.

In Chevalier, the employee had been the manager of an auto and tire centre. He was 55 years old and had worked there for 33 years. The employer was having financial troubles. The employer thought (erroneously) that he was entitled to lay the employee off on that basis without providing adequate notice. The employee took legal action. Five days after litigation began, the employer recalled the employee to work.

The employee declined to return to work and instead proceeded to trial. The employee made several allegations against his employer. He claimed that he was not prepared to return to his job because it would be too embarrassing and humiliating. The employee also claimed that his employer had embarked on a deliberate campaign of harassment and intimidation which made returning to work impossible. But the evidence simply did not support his claims. The Court found no basis to conclude that the employer had been motivated by anything other than legitimate business reasons when it decided to lay off this employee. In short, the employer had not engaged in poor conduct or any “campaign of harassment”. In the end, the Court found that a reasonable person in the same position would have accepted the offer to return to the workplace. Since the employee should have returned to work when requested, but refused, no damages were awarded.

What does this mean as a practical matter? If you lose your job, and later your employer changes its mind and offers you your job back, are you obliged to take it? If you are an employer, are you under an obligation to re-employ a terminated employee? Are there limits on how and when it should be done?

Here are a few things to think about if you are an employee faced with this situation. The legal landscape has changed. Judges are unlikely to be impressed by the fact that you may find it uncomfortable to return to work after being let go. This is particularly true if your employer has been experiencing financial difficulties. Getting a new job is difficult, and when an employer makes a legitimate offer to rehire an employee, unless you have something better waiting for you, most employees would be foolish to not accept the offer and demand a notice payment instead. The Courts are unlikely to side with the employee unless there is evidence that the employer’s offer is insincere or that the relationship between the employer and the employee is completely irreparable. Similarly, a court would not expect an employee to accept a job offer from their former employer if there is evidence that the employee was humiliated or embarrassed prior to being let go.

If you are an employer, your intentions must be sincere and should look that way too. Optics are very important. Employers who can show that they have behaved appropriately and that the work environment is respectful may save themselves significant severance dollars. Employers must act at all times as though a record is being created (and make sure that they do create a documentary record) and conduct themselves appropriately. Employers who do so can limit their liability and a potential wrongful dismissal suit down the road.

Join me again on Wednesday, I will discuss mitigation in context of more traditional dismissal cases.

The above blog post is for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Readers are advised to seek specific legal advice regarding any specific legal issues.
 
Marie- Hélène Mayer B.A. (Hons.), LL.B/J.D. is an employment lawyer with Rubin Thomlinson LLP. Marie-Hélène has spent most of her career in private practice appearing before various administrative tribunals and courts. Her primary focus is advising employers and employees on workplace issues under both Ontario and Federal law, termination settlements, employment contracts, wrongful dismissal litigation and human rights complaints. Marie-Hélène has also worked for a large financial institution, where she acquired corporate human resources experience. Having worked in both private practice and in the corporate world means that Marie-Hélène can skillfully apply and interpret employment law in today’s business workplace. Marie-Hélène may be reached at mmayer@rubinthomlinson.com. Marie- Hélène’s own blog can be found at Club Mom

6 comments:

  1. Interesting!

    On a related note, no one's job is safe. Ask the folks at Nortel. Or ask the thousands of young teachers who can't find work in a career seen for decades as entirely safe. Heck my wife worked for a university and was forced out of her job over what I would call politics (a lawyer assured us the situation was illegal, but also assured us probably not worth pursuing).

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    1. Hey Glenn:

      Not only is no one's job safe, many people dismissed are far more competent than those retained, that is what often drives me crazy.

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  2. From an economic perspective I can understand the judge's decision. However, this is a ridiculous judgement from a personal perspective. I cannot imagine being fired and being required to go back to that workplace. It would be humiliating in almost all circumstances and I don't feel the economic decision should rule the day.

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  3. Hi Blunt Bean
    Firstly I dont generally publish anyone's email address as it becomes bot feed. Secondly I think this post really needs a picture of Marie- Hélène Mayer or her office front door or something to sell it. And if you wanted to do her a favour you would extend the hyperlink to her law firm website to include the words 'employment lawyer at' as then you'd be telling Google whats there, and they'd listen to you because you're important.

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    1. Hi Robert

      Thx for the ideas, I will ignore them as usual :)

      Delete