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Constructively Dismissed Employee Ordered to Pay Employer $57,500.00 for Failure to Accept Re-Employment

On June 27, 2013 we blogged about the Ontario Superior Court’s decision in Chevalier v. Active Tire & Auto Centre Inc., where the Court found that although Mr. Chevalier was constructively dismissed by Active Tire, he was not entitled to damages because he declined an offer of re-employment from Active Tire. Not only did the Court find that Mr. Chevalier was not entitled to damages, but the Court ordered Mr. Chevalier to pay Active Tire’s legal fees in the amount of $50,000. For a review of the fact of the case and a more extensive overview of the Court’s findings, please click here.

Mr. Chevalier appealed the Superior Court’s decision, and last month the Ontario Court of Appeal released a short endorsement dismissing Mr. Chevalier’s appeal and upholding the trial judge’s decision. The Court of Appeal found that it was open to the trial judge to make the findings of fact that he did, and that the trial judge applied the appropriate legal principles. The Court of Appeal in effect agreed with the trial judge that Mr. Chevalier ought to have accepted Active Tire’s re-employment offer, even though the offer was made after he commenced a claim for constructive dismissal. The Court of Appeal also upheld the trial judge’s findings that a return to work would not have resulted in Mr. Chevalier having to work in an atmosphere of hostility, embarrassment or humiliation, as he had claimed. The Court of Appeal ordered Mr. Chevalier to pay to Active Tire an additional $7,500 in costs.

The Court of Appeal’s decision is consistent with the Supreme Court of Canada’s decision in Evans v. Teamsters Local Union No. 31, where the Court held that an employee who was constructively dismissed has an obligation to mitigate his or her damages by continuing to work with the employer, unless the continuation of work would result in the employee having to work in an atmosphere of hostility, embarrassment or humiliation. Since the Evans decision courts have been inconsistent in following this principle, but in light of the Court of Appeal’s decision in Chevalier that trend is likely to change.

The Court of Appeal’s decision is good news for employers. The duty on constructively dismissed employees to mitigate damages has existed for a long time, but was employee-friendly and not consistently enforced by decision makers. The duty to accept continued employment or re-employment with the dismissing employer is much more employer-friendly, as the employer retains control over the employee’s mitigation efforts. In addition, the finding that an employee who was constructively dismissed has to pay $57,500 in costs to his former employer may be viewed as a deterrent by employees who would otherwise make frivolous constructive dismissal claims.

Please contact one of the CCPartners team members with any questions you may have with respect to this decision or if you require assistance with offers of continued employment or re-employment in constructive dismissal situations. 

Please Note: This blog has been prepared as an informational service for our clients and other interested parties. It is not intended to constitute legal advice, a complete statement of the law or opinion on any subject. Although we endeavour to ensure the accuracy of the content, no one should act upon the information provided without a thorough examination of the law after the facts of a specific situation are fully considered.



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