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Constructive Dismissal Damages Reduced to Zero for Failure to Mitigate
August 24, 2012

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

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

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

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

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