Friday, 6 July 2012

Guarding the Duty to Mitigate

A story came out of Florida this week about a lifeguard who was terminated (read: fired) for saving a drowning man “outside his zone.” Click this link for The Globe & Mail's story

Some have asked whether his actions would be “just cause” for dismissal. While I have no intention of weighing in on what would or would not rise to the level of “just cause” in Florida, where concerns about litigation seem much higher than Ontario, the case does present an interesting case study on the issue of “mitigation.”


As the story goes the lifeguard, one Tomas Lopez, has since been offered his job back – but he has refused.

Were this a Canadian lifeguard, would he have a case for wrongful dismissal? The answer might be surprising. I say "no" and I base that opinion on the Supreme Court of Canada’s decision in Evans v. Teamsters Local Union No. 31, 2008 SCC 20 (CanLII).

Facts in Evans


As is set out in the headnote in CanLII:

Donald Evans was employed for over 23 years as a business agent in the Teamster’s Whitehorse office. Following the election of a new union executive the incoming president faxed Mr. Evans a termination letter, and later that same day telephoned him to “commence discussions”. In reply Mr. Evan’s lawyers wrote a letter to the incoming president claiming that Evans was entitled to reasonable notice of the termination of his employment. The lawyers informed the Teamsters that Mr. Evans was prepared to accept 24 months’ notice of termination and suggested that this could be granted through 12 months of continued employment followed by a payment of 12 months of salary in lieu of notice. Subsequent to this proposal there was a continuing exchange of correspondence between the lawyers, but no resolution was reached. In the meantime, the union continued to pay Evans his salary and benefits. Evans stated during this period that he wanted a settlement which would see him retire and his wife replace him as the union’s business agent. Evans also became aware that other union employees who had been fired on the same day and in the same way had been reinstated, either with working notice or unconditionally. Five months later Mr. Evans received a letter from the union’s legal counsel requesting that he “return to his employment… to serve out the balance of his notice period of 24 months” and stating that, if he refused to return, the union would “treat that refusal as just cause, and formally terminate him without notice”. Evans indicated he would return to work provided the union immediately rescinded its termination letter of January 2003, but the union was not prepared to do so.

Decisions in the Courts Below


The trial judge found that Mr. Evans had been wrongfully dismissed and that he was entitled to 22 months’ notice.  He also found that the union had not shown that Evans had failed to mitigate his damages.  Evans was awarded over $100,000 in damages, representing the salary and allowances owed to him. 

The Court of Appeal set aside the damage award, holding that Mr. Evans had not acted reasonably with respect to the job offer made to him by the union, and that this constituted a failure to mitigate his damages.

View from Supreme Court of Canada


Writing for the Court (Justice Abella dissenting), the Honourable Justice Bastarache held that:

In my view, the courts have correctly determined that in some circumstances it will be necessary for a dismissed employee to mitigate his or her damages by returning to work for the same employer. Assuming there are no barriers to re-employment… requiring an employee to mitigate by taking temporary work with the dismissing employer is consistent with the notion that damages are meant to compensate for lack of notice, and not to penalize the employer for the dismissal itself. The notice period is meant to provide employees with sufficient opportunity to seek new employment and arrange their personal affairs, and employers who provide sufficient working notice are not required to pay an employee just because they have chosen to terminate the contract. Where notice is not given, the employer is required to pay damages in lieu of notice, but that requirement is subject to the employee making a reasonable effort to mitigate the damages by seeking an alternate source of income. [Para. 28. Emphasis added.]

Application to Mr. Lopez’s case


Returning to Mr. Lopez, would it be prudent for him to accept the position as a lifeguard with the company from which he was fired? With respect to a potential wrongful dismissal case, under Canadian law, I would submit that yes, it would be prudent and his failure to do so might result in a decision similar to that of Mr. Evans.

Commentary


As the quoted paragraph above demonstrates, there is more to wrongful dismissal than initially meets the eye. Employees who find themselves suddenly unemployed nonetheless have a legal duty to “mitigate their damages” by finding new employment. Sometimes that can mean returning to the employer from whom they were fired.

Of course, as the Court observed, not every case is the same and there may be occasions where, for a host of reasons, it is inappropriate to expect an employee to return to their former employer. Of course, that decision should only be taken on legal advice.

As for Mr. Lopez, one will see what comes; being Florida I can only speculate on the outcome.

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As always, everyone’s situation is different.  The above is not intended to be legal advice for any particular situation and it is always prudent to seek professional legal advice before taking any decisions on one’s own case.

Sean Bawden is an Ottawa, Ontario employment lawyer and wrongful dismissal lawyer.  He tweets from @SeanBawden.

3 comments:

  1. I'm not so sure for a couple reasons. Consider the high level of media attention in the case. It'd be easy to argue that in effecting the termination created a situation where Mr. Lopez wouldn't able to enjoy a modicum of privacy in his employment. The situation was simply too notorious. Essentially, barriers to re-employment exist. It'd be a simplistic case to settle given the level of media interest and the amount of leverage that creates.

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    1. At least part of the problem here is the media scrutiny itself; which I suspect has more to do with Florida than with much else. However, running Bardal, one has to query exactly how much this person would receive in any event.

      As for the media scrutiny, at least some of that must be self-created and if it is, can one use same to plead barrier to re-entry?

      All I am saying is that it provides an interesting case study on the duty to mitigate as envisioned by our Supreme Court.

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  2. For the record, I do not wish to leave readers with the impression that Mr. Lopez would have to accept the offer to return to his former. My point is that if he refused the offer, then he may difficulties advancing a wrongful dismissal case.

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