Court of Appeal Confirms it Can be Reasonable to Refuse New Employment if New Position is Not Comparable to Position Lost

Is it reasonable for an employee, slated to lose his or her employment as a result of the sale of part of his or her company, to refuse an offer of new employment with the purchaser of the business?

In Dussault v. Imperial Oil Limited, 2019 ONCA 448, the Court of Appeal for Ontario confirmed that it is reasonable if the new position fails to be comparable in status, hours and remuneration.

Twenty-Six Months’ Notice Awarded to Employees Who Rejected Offer of Continued Employment

Is an employee who is slated to lose his or her employment as a result of the sale of part of his or her company required to accept an offer of employment from the purchaser, if that offer of employment is on substantially less favourable terms?

If the employee reasonably rejects that offer, then what is the maximum amount of ‘severance’ to which a wrongfully dismissed employee can be entitled? While many will tell you that 24 months is the most a court will ever award for reasonable notice, as this blog has noted on more than one occasion, see e.g. What is the Maximum Amount of Reasonable Notice Under Ontario Law? and Is Twenty-Six the new Twenty-Four? Taking the 'Cap' off the Limit on Reasonable Notice, and as the Honourable Justice Lois Roberts (now of the Court of Appeal for Ontario) said in the case of Hussain v. Suzuki (2011), 209 A.C.W.S. (3d) 101 (ON SC):

There is no cap on the amount of reasonable notice of employment termination to which an employee may be entitled.

On February 20, 2018, the Ontario Superior Court of Justice in its decision in Dussault v. Imperial Oil Limited, 2018 ONSC 1168, once again confirmed that there is no such thing as a “hard cap” at 24 months and took a good, hard look at the obligations of an employee to mitigate his or her damages by accepting a substantially less lucrative offer of employment from the purchaser in an asset sale arrangement.

“Retiring Allowances” and the Taxation of Wrongful Dismissal Damages

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Lawyers are often loathe to guarantee anything. However, it is said that two things in life are guaranteed: death and taxes.

This “guarantee” raises an important issue for the settlement of any wrongful dismissal case, the taxation of wrongful dismissal damages. While employers and employees can and often will agree to a favourable characterization of such damages, as the case of Ferhman v Goodlife Fitness Centres, Inc., 2017 ONSC 4348 (CanLII) demonstrates, sometimes that is not done and employees can end up receiving a lot less money – net of taxation – than they anticipated.