Court calls employer’s bluff on mitigation

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Ever since the Supreme Court’s ruling in the now-famous (at least in employment circles) Evans v. Teamsters case, employers have had a new “weapon” at their disposal in wrongful dismissal cases: mitigation. 

Mitigation of damages, in the context of a wrongful dismissal, is the reduction of one’s damages through alternate employment.  Briefly, a dismissed employee has a duty to mitigate his or her damages by searching for alternate employment; any mitigation that is achieved is subtracted from any damage award for reasonable notice. 

Further, if the Court finds that appropriate mitigation efforts were not made, or ignored, the Court can also reduce the damage award.

While the obligation to mitigate has long existed in wrongful dismissal cases, Evans broke new ground when the Supreme Court pronounced that the obligation to mitigate goes so far as to require a dismissed employee to even accept alternate employment with the same employer.  This was seen in some circles as a major breakthrough for employers, and in one sense it certainly is: when dealing with changing terms and conditions of employment, claims of constructive dismissal can often be diminished – if not negated – with the proper execution of the offer of alternative employment, given this extension of the duty to mitigate.

However, as one Newfoundland employer recently found out, simply relying on the mitigation obligation in a wrongful dismissal case is not necessarily going to win the day.  This is especially true when the offer made to the employee is insincere and when the employer’s conduct leaves something to be desired. 

In such cases – where the employment relationship has been damaged – Evans says that an employee would not necessarily be required to accept alternate employment (or re-employment as the case may be).

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