Is There a Duty to Accept Re-employment?

Contrary to popular belief, dismissed employees are expected to make reasonable efforts to find replacement employment. In law, we refer to this as the “duty to mitigate.” The consequence of failing to mitigate is a lower damage award (for further information on the duty to mitigate, see The Duty To Mitigate).

After a dismissed employee commences an action against their employer for damages, the employer will often offer to re-hire the employee. This raises the interesting question of whether the duty to mitigate requires the employee to accept offers of re-employment. In other words, does the duty to mitigate include a “duty to accept re-employment” with the same employer?

The short answer: it depends. The legal test asks whether a “reasonable person” in the employee’s position have accepted the employer’s offer. This of course depends on the particular facts of each case.

The BC Court of Appeal provided some recent guidance on this very issue, in Fedrickson v Newtech Dental Laboratory Inc., 2015 BCCA 357.

The pertinent facts are as follows. An employer dismissed an employee after over eight years of employment. The employee retained a lawyer and commenced legal action against the employer. In response, the employer made multiple offers of re-employment. The employee rejected each offer.

At trial, the judge held that the employee’s failure to accept re-employment constituted a failure to mitigate, and reduced the employee’s damage award accordingly. The employee appealed.

The Court of Appeal overturned the trial decision, holding that the duty to mitigate did not require the employee to accept re-employment in the circumstances – for two reasons:

  1. the offers of re-employment were not “make whole” offers; and
  2. the employer’s conduct eroded the mutual trust inherent to the employment relationship.

Based on the above, a “reasonable person” in the employee’s position would not have accepted the employer’s offers. So the employee’s rejection of the offers was not a failure to mitigate.

The bottom line is this: a duty to accept re-employment may arise in narrow circumstances and is therefore worth discussing with your lawyer.

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