Refusing to Return to Work and the Duty of Mitigation

Constructive Dismissal and the Duty to Mitigate: Case Analysis

Experiencing dismissal or layoffs can be a daunting ordeal, especially in times of uncertainty, such as the ongoing pandemic. For employees who find themselves wrongfully dismissed or constructively laid off, there exists a crucial responsibility – the duty to mitigate. This duty necessitates taking reasonable actions to seek out comparable employment in order to minimize financial losses. Neglecting this duty could significantly reduce the compensation an employee is entitled to.

In this article, we delve into a notable case, Gent v. Strone Inc., 2019 ONSC 155, where the Ontario Superior Court of Justice delivered a pivotal judgment. It revolved around a situation where an employee, after experiencing constructive dismissal due to a layoff, refused to return to work upon receiving a recall notice, thereby triggering a debate on the failure to mitigate.

The Case

Meet Mr. Gent, a dedicated employee who had been with Strone Inc., his employer, for an impressive 23 years. In 2015, due to a downturn in business, the employer temporarily laid off Mr. Gent, with the assurance of reemployment as soon as the business picked up.

One month later, the employer recalled Mr. Gent, but he declined the offer, citing ‘humiliation’ as his reason, and proceeded to claim constructive dismissal. The employer contested this claim, asserting that even if Mr. Gent had experienced constructive dismissal, he failed to mitigate his losses by refusing to return to work.

The Verdict

The Ontario Superior Court of Justice ruled in favor of Mr. Gent, confirming his constructive dismissal. As per their interpretation of the employment agreement, the employer had no legal basis to temporarily lay off Mr. Gent.

However, the Court also highlighted that Mr. Gent failed to fulfill his duty to mitigate by rejecting the employer’s recall. Consequently, Mr. Gent was granted compensation of just $4,846.50 for a notice period of 3.5 weeks. The Court found Mr. Gent’s refusal to return to work to be unreasonable, as he provided no substantial evidence of his ‘humiliation’ to substantiate his decision.

Had Mr. Gent successfully mitigated his situation, he could have been entitled to compensation for an 18-month notice period.

In Conclusion

The legality of temporary layoffs depends on the agreements in place and the validity of employment contracts. However, regardless of these factors, an employee’s duty to mitigate remains unwavering.

Concerning layoffs, employees are expected to return to work unless a reasonable person would find it exceptionally embarrassing, humiliating, or degrading to do so. Factors taken into account include the workplace environment, social stigma, loss of personal dignity, and the terms and conditions of employment. A temporary layoff alone is usually insufficient to absolve an employee of their duty to mitigate.

Neglecting this duty can have severe financial implications for employees, potentially depriving them of substantial compensation they would otherwise be entitled to.

For a comprehensive understanding of their rights and obligations, both employers and employees are strongly advised to seek legal counsel. This proactive step can help them steer clear of potential liability issues and safeguard their entitlements.

Related Reading

Constructive Dismissal: Non-Discretionary Bonus and Performance Reviews

Duty to Mitigate: An Employee Obligation

Wrongful Dismissal: Gathering Evidence

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