The BC Court of Appeal recently considered whether or not an employee is required to mitigate her damages by returning to employment with her former employer.
In Frederickson v. Newtech Dental Laboratory Inc., the plaintiff was employed as a dental technician assistant at Newtech Dental Laboratory. From April to July 2011, she was absent from work on a medical leave. When she reported for work following her leave, she was informed that she was laid off due to insufficient work.
The plaintiff then claimed that she had been dismissed from her employment. Newtech disputed that she had been dismissed, but advised through counsel that if she had been dismissed, she was obligated to mitigate her damages by resuming work with Newtech effective September 26, 2011, without back pay. The plaintiff declined to return to work with Newtech and commenced a wrongful dismissal action on October 18, 2011.
On October 19, 2011, Newtech again offered to re-employ the plaintiff, this time with an offer to pay her unpaid wages from July to September. On October 25 and November 4, 2011, Newtech again offered to re-employ the plaintiff in her same position and pay her lost wages to the date of the first offer of re-employment. The same offer was extended again in April 2012. The plaintiff declined all offers of re-employment.
At trial, the judge concluded that it would have been reasonable for the plaintiff to accept the re-employment offers in order to mitigate the damages arising from her dismissal. On that basis, he awarded damages only from the date of dismissal to the date of the first offer of re-employment.
The plaintiff appealed to the BCCA. The Court overturned the trial judge’s decision and held that, in the circumstances, it was not reasonable to expect the plaintiff to mitigate by returning to work with Newtech. In particular, the Court found that none of the offers of re-employment were “make whole offers”. In addition, the Court found that the plaintiff had lost trust in her employer. In particular, her boss had surreptitiously recorded two conversations with her (and sought to use them against her) and had also discussed with another employee in their small office whether the plaintiff would be too embarrassed to return to work. On this basis the Court concluded that she did not fail to mitigate by refusing the offers of re-employment.
This decision demonstrates that whether or not it is reasonable for an employee to mitigate by accepting employment with his or her former employer depends on the circumstances of each case, including the nature of any re-employment offers and the conduct of the employer during and following the dismissal. In light of this decision, employers should carefully consider the content of re-employment offers and whether or not the offers will make the employee whole. Employers should also ensure they act in utmost good faith during any dismissal and any subsequent negotiations.
Questions relating to the content of this article should be directed to Dianne Rideout.