Mitigation - do you really have to take any job?
If you are terminated without just cause, you can bring a claim for pay in lieu of notice. Your obligation, however, is to mitigate your damages. That means that you must show the judge that you have made reasonable efforts to look for new employment and if you were offered reasonable alternative employment, accepted it. If you turn down that reasonable job offer, the judge will pretend you did and deduct any money you could have made from your award.
But what happens when that offer of similar alternative employment comes from the company that just fired you?
The scenario usually goes something like this: Gina has worked for nine years as a customer service rep for a small company. They terminate her and provide her with eight weeks’ pay in lieu of notice which is the minimum under the Employment Standards Act. They mistakenly believe that that is all they are ever going to have to pay. They tell her that her attitude has gone downhill and she is no longer a good fit. A few weeks later, they get a letter from Gina’s lawyer indicating that after nine years of service she would be entitled to a minimum of seven months’ pay in lieu of notice and demanding another five over and above the two months already provided.
Now that they know they might have to pay her up to seven months’ pay in lieu of notice, they are not prepared to just hand over the cash.
The lawyer for the company says the company has changed its mind and Gina can come back to work at her same job at the same rate of pay the following Monday. If Gina refuses to return to work, it will be the company’s position that she failed to mitigate her damages.
When Gina’s lawyer calls her and tells her the offer, she is apoplectic at the thought of having to go back to her old employer. After rendering nine years of faithful service, she was suddenly thrown out on her ear and told that she had a bad attitude. She knows from talking to some of her old colleagues that everyone at the office was told that she was let go for this alleged bad attitude. The thought of walking through the door is crushing.
In this case, Gina does not have to worry. The law says that there are some instances where an employee may have to accept an offer of re-employment by the employer that terminated her but not if the position is substantially different or the working conditions would be humiliating or demeaning.
Now, let’s assume that Gina was let go as a result of a shortage of work. The business had been slowing down and Gina was the newest CSR. The same scenario unfolds. The employer offers Gina her job back because if they are going to have to pay seven months’ pay in lieu of notice they want to revoke the termination.
When the case gets to trial, however, it comes out that the employer knew perfectly well that the Employment Standards Act minimums were just minimums. It appears that the employer was hoping that Gina would not realize that there was more pay in lieu of notice to be had. The only reason they offered the job back is they got caught trying to terminate her employment with too small a severance package.
I believe most judges would not expect Gina to return to work. If it becomes evident that the employer is playing a game, the judge will find a way to hold that Gina was not obliged to return to mitigate her damages. If not it would become open season on employees: Give them the minimums and if you hear from a lawyer, offer them their job back. If they don’t come back because they are already traumatized by the termination and want to move on, you can claim they failed to mitigate.
As published in the Hamilton Spectator, May 13, 2013