Defendant Cannot Plead its Rejected Settlement Offer :

In Renzone v Onyx Homes ( 2020 ONSC 7722) Master Josefo stuck from the Statement of Defence a plea that the defendant had offered a terminated employee the chance to return to work after being dismissed so that she could work out her notice period. The Defendant presumably wanted to rely on this refusal as a basis for arguing that the Plaintiff failed to mitigate her damages, relying on the SCC decision in Evans v Teamsters ( 2008 SCC 20).

The Master ruled that this was clearly an offer to settle, and therefore was not admissible as evidence at a trial and therefore could not be plead.

The Master noted that the offer was labelled ” Without Prejudice “, that it contained a confidentiality clause and required the Plaintiff to sign a release.

My Comment:

If an employer wants to trigger a Evans v Teamsters defence, in my opinion they must set out clearly that the ex employee is free to return to work for the balance of the notice period without conditions. In other words, if the employee does choose to return to work, then they are still free to continue the lawsuit. If the employee refuses to return to work, this may well trigger a valid defence of a failure to mitigate.

This is how the Master said it:

Observations on Mixing Without Prejudice and With Prejudice Communications:

[25] The May 29th letter tried to be, in my view, “all things to all people”. It was, for reasons herein, an offer of compromise. It thus falls squarely within settlement privilege. Yet it also appears to me that defendant was trying to position itself in this within litigation, after it had retained counsel and after it unilaterally imposed new terms on the plaintiff which were to start within a few days but for her commencing sick leave first. This one letter confusingly tried to impart several different messages, including, significantly, I emphasize, that of settlement. Yet if settlement failed, another purpose of the May 29th letter was, as was specifically pleaded at paragraph 51 of the defence, the defendant trying to establish a “failure of mitigation” argument on the part of the plaintiff. Whether such would be viable over three weeks after the planned imposition of new terms of employment is an open question.

[26] Yet where the defendant ran into difficulties, in my observation, was in attempting to combine different elements and messages in the one letter. One take-away may be that, in future, counselshould not mix “with prejudice” and “without prejudice” elements in the same one item of correspondence. Writing separate letters or emails, each with their individual and clear messages, and each either clearly on or off the record, with or without prejudice, may assist to avoid such confusion.

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