Refusing a Return to Work after Layoff Found to be a Complete Failure to Mitigate:

In Blomme v. Princeton Standard Pellet Corporation, 2023 BCSC 652, Justice Mac Naughton had a situation involving a 64 year old Plant Supervisor with 20 years service in a small town who was initially laid off due to COVID on April 4, 2020 with an unexpected date of recall. She accepted the layoff at that time and did not claim constructive dismissal. She had never been laid off before .

The Plaintiff met with her boss on July 2 and expressed her anger that a more junior supervisor had been recalled but not her.

They met again on August 6 at which time the boss told her that they would extend her benefit coverage to December 31 and then if she was not recalled by that date, they would pay her her 8 weeks termination pay under the ESA.

On October 1 2020 the Plaintiff sent a demand letter from a lawyer claiming that she had been wrongfully dismissed as of August 30 as this was the end of the ESA temporary layoff period and asked that all responses be directed to him.

Rather than respond to the Plaintiff’s lawyer, the boss continued to communicate directly with the Plaintiff asking her if she wanted to return to her old job. Again her  lawyer directed that all communication be directed to him .

The boss again ignored the lawyer and told the Plaintiff that she could return November 3 to her regular job.

On October 30, the Defendant’s lawyer sent a letter to the Plaintiff’s lawyer and confirmed that she was owed 8 weeks pay and repeated the offer of the return to work on November 3.

That offer was not accepted .

The Judge found the following :

  1. The Judge found that the Defendant did not understand that as of August 30 the Plaintiff was deemed to be terminated under the ESA until they got the demand letter of October 1. The Judge found that the employer never intended to terminate her employment.
  2. The Judge  nothing wrong with the Defendant ignoring the Plaintiff’s lawyer letter to direct all comments to him not his client.
  3. The Defendant always intended to recall the Plaintiff, the only issue was the timing .
  4. Pursuant to the ESA, her employment was terminated on August 30 and the ESA termination pay of 8 weeks was owing. This was also her termination date under the common law.
  5. The reasonable notice period was between 15 and 16 months.

The real issue was whether or not the Plaintiff failed to mitigate her damages by refusing the offer returning to work on November 3 and to receive 8 weeks termination pay.

This is what the Judge said on this issue :

[95] Reframed for the circumstances in this case, the issue is whether Ms. Blomme, who was terminated by operation of statute after a temporary layoff that she initially agreed to, and who by October 1, 2020, took the position that she had been terminated, was required to mitigate by returning to work for Princeton in the same job as she had before the termination. Ms. Blomme’s circumstances are far-removed from a termination based on concerns about her performance. There was nothing personal about the decision to lay off Ms. Blomme, and I have accepted that Princeton had a legitimate reason for deciding to recall Mr. Mills before her. Even if Princeton was wrong in that assessment, it was not a decision made with the intent to humiliate Ms. Blomme.

[96] In this case, Ms. Blomme was not singled out for layoff. She was one of a number of management and union staff at Princeton who were laid off as a result of the unprecedent global pandemic faced by many employers.

[97] In the absence of conditions that would render her return to work unreasonable, on an objective basis, Ms. Blomme was expected to mitigate her damages by returning to work for Princeton. A reasonable person would be expected to do so.

[112] I conclude that, in the circumstances of this case, a reasonable person in Ms. Blomme’s position would have accepted Princeton’s offer. Although the specific terms of her re-employment were not set out in Mr. White’s October 8, 23, and 26 emails, it was incumbent on her to at least explore the option of returning to work. Ms. Blomme was being asked to return to the same position, salary, and benefits, which had never been cut off: see e.g. Davies at para. 43. There was no evidence to support that she would be returning to an atmosphere of hostility, embarrassment, orn humiliation. There was no evidence that either Mr. White or Mr. Andrews bore Ms. Blomme any animus. Ms. Blomme’s mistrust of Mr. White appears to have been an unfortunate result of their miscommunication and misunderstanding.

[113] In any event, on October 26, 2020, Mr. White wrote to Ms. Blomme, suggesting a return to work as soon as November 3, 2020, on her regular shift. Again, Ms. Blomme did not respond.

[115] Even if Princeton’s decision to offer Ms. Blomme the option of returning to work was triggered by the Demand Letter and its wish to avoid litigation, it was an offer she should have considered: see e.g., Hooge at para. 89. Her failure to do so resulted in a failure to mitigate.

[116] The layoff occurred in the context of a global pandemic during which many employees were laid off, including many others at Princeton. There was a reasonable explanation for why Ms. Blomme was not recalled when other employees were.

[117] Alternatively, Ms. Blomme should have accepted Princeton’s offer of eight weeks’ pay in lieu of notice and re-employment set out in its letter dated October 30, 2020.

[118] Had Ms. Blomme returned to work as offered, and based on a termination date of October 1, 2020, she would have been made whole.

Thus her entire claim was dismissed.

My Comments:

This case illustrates the extreme risk that Plaintiffs take when they refuse an offer to return to work. As long as the offer is not tied to a release and the employer offers to pay any losses up to the date of the return to work date, there is a real chance that the Plaintiff’s claim will fail .

In this case, the Plaintiff only claimed that the dismissal took place at the end of the ESA temporary layoff period. The outcome may have been quite different had she claimed that her dismissal took place either  at the time of  the original layoff or at least when she expressed her anger at not being recalled in July.

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ESA Savings Clause Does Not Save the Illegal Termination Clause:

In Tan v. Stostac Inc., 2023 ONSC 2121 Justic Dineen was faced with a termination clause that said the following in part :

The Employer may end the employment relationship at any time without advanced notice and without pay in lieu of such notice for any just cause recognized at law. 

The provisions of the Ontario Employment Standards Act, 2000, as they may from time to time be amended, are deemed to be incorporated herein and shall prevail if greater. 

This is why the judge found the clause illegal :

[11] In my view, the termination clause in this case suffers from the same flaw identified in the line of cases cited above by giving the defendant the right to terminate the plaintiff’s employment without notice or payment for just cause that might fall short of non-trivial willful misconduct. I do not accept that the attempt to incorporate the ESA’s provisions in the final sentence of the clause’s “without cause” portion detracts from the clear assertion of a right to terminate without notice for any just cause. 

My Comment:

This case again declares that any illegality in a termination clause anywhere in the employment documents is not made suddenly legal because they have one of these savings clauses.

The clause itself must be in compliance with the ESA. It is not sufficient to have an illegal clause and then say ” In any event you shall always receive no less than required by the ESA “.

The policy reason behind this case seems to be that a person should be able to read their employment contract and know what he or she will and will not receive upon termination, without the requirement of also having intimate knowledge of the numerous provisions in the ESA that deal with termination and that might conflict with the plain reading of the termination provision.

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Silence is Not Condonation in Temporary Layoff Cases:

In  Pham v. Qualified Metal Fabricators Ltd., 2023 ONCA 255 , an appeal to the Ontario Court of Appeal, the Court overturned the trial judge’s finding that because the Plaintiff did not actively protest his layoff for 9 months, that he had in fact accepted the legitimacy off the layoff and thus could not claim that he had been constructively dismissed at the time of the layoff .

The plaintiff was temporarily laid off in March of 2020 and retained a lawyer in December 2020 who promptly sent a demand letter to the Defendant.

The Court stated these principles in deciding whether or not there was condonation.

  1. The signing of the layoff letter was not not evidence of acceptance of the legality of the layoff, it was merely acknowledgement of receipt of the letter.
  2. The fact that he claimed constructive dismissal immediately after retaining a lawyer shows that he only became aware of his right to claim constructive dismissal at that time and responded immediately.
  3. An employee is to be given a reasonable time to assess their legal situation. In this case the Plaintiff had been given a series of layoff notice and seemed to adopt a wait and see approach to see if he would actually be recalled.
  4. Most importantly, “condonation in the face of a layoff is expressed by positive action. Positive action includes expressed consent to the layoff or expressing a willingness to work before claiming wrongful dismissal such that the employer would reasonably believe that the employee consented to the change in the terms of employment: 
  5. The fact that the employee was not actively at work during the layoff period means that he could not condone the change in his employment .
  6. “Moreover, there is no requirement for an employee to ask when they might be called back to work before commencing an action for constructive dismissal: “

My Comments:

When an employee is given a temporary layoff notice, there is an implicit promise that the employee will be recalled, otherwise it is a permanent layoff.

In this case,  the Plaintiff was given a 13 week layoff notice at the beginning of the pandemic. Surely he was entitled to believe his employer that he would be recalled within that 13 weeks. When it got extended the second time to 35 weeks, the Plaintiff accepted it for a time because again he probably believed that he would be recalled shortly.

But by December he was fed up.  He had been on layoff for 9 months. He had now lost faith in his employer’s promise. He went to see a lawyer , was told of his rights, and acted promptly.

If the law was that a failure to respond to a temporary layoff had to be immediately acted upon otherwise it is deemed to be accepted, then employers would be faced with a plethora of lawsuits every time they conducted any layoff.

Moreover, how could one determine when  the condonation through silence actually occurred ? Is it one day, one month , 6 months ? Are we going to add even more uncertainty to the area of employment law?

Surely it is not an onerous burden on employers to require them to obtain the employee’s express consent to their right to layoff, either in the initial employment contract or at the time of the layoff. Employment contracts are two way agreements. Employees certainly don’t have the right to say to their employers ” Hey boss, I am going to take a 6 month leave of absence. See you in the fall sometime. Oh, by the way, I may extend my leave even longer, but I haven’t decided yet.”

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Failing to Offer Full Backpay Means Employee Did Not Fail to Mitigate by Refusing to Return to Work After Dismissal :

In Northern Air Charter (PR) Inc v Dunbar, 2023 ABKB 171, Justice Woolley sitting on an appeal, had to deal with an increasing common situation.

The plaintiff was laid off and was given no notice. The plaintiff hired a lawyer to send a demand letter claiming wrongful dismissal damages. The employer then turned around and offered the Plaintiff his job back but made no offer to pay him for the time off, which was 2.5 months.

This is what the judge said :

[63]        The trial judge correctly summarized the Supreme Court’s decision in Evans. The rest of his decision on the issue of mitigation involved a question of mixed fact and law, and is subject to review for palpable and overriding error.

[64]        The trial judge made no such error. An employee’s failure to accept an offer to return to employment, even in uncomfortable or unhappy circumstances, can constitute a failure to mitigate, as was the case in Evans. An employee is not, however, required to accept an offer of employment regardless of the circumstances: Fredrickson v Newtech Dental Laboratory Inc, 2015 BCCA 357; Oostlander v Cervus Equipment Corporation, 2022 ABQB 200.

[65]        Here, Northern Air did not provide Mr. Dunbar with notice. He had been out of work for two and a half months, half the notice period to which he was entitled, as found by the trial judge. Northern Air did not offer to make Mr. Dunbar whole. As such, had Mr. Dunbar returned to work at Northern Air he would have been in the awkward position of either giving up his legal claim for notice, or being engaged in legal proceedings with his employer. The trial judge did not make a palpable or overriding error in finding that a reasonable person would not accept an offer of employment in those circumstances.

My Comments:

This case reminds us that in order for an Evans v Teamsters type tactic to succeed the employer should offer full backpay to the employee or the refusing Plaintiff will probably have the right to refuse the offer.

Another common mistake of employers is to make the recall an offer intended to end the proposed litigation. If this is done then the Plaintiff can argue that as this was a settlement offer, it is inadmissible in Court as it is contrary to the settlement privilege rule.

Thus the recall letter should be “with prejudice” and the employee should be advised that they are not required to discontinue the lawsuit in order to return to work. They should further be advised that of they refuse the recall, the employer will claim that the plaintiff has failed to mitigate his damages from that date forward.

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