Fillmore v. Hercules: Refusal to Accept New Offer is Not a Failure to Mitigate

by Samfiru Tumarkin


Tuesday, April 11th, 2017 at 2:04 pm


Samfiru Tumarkin LLP Wins Appeal

Our firm extends congratulations to partners Lia Moody and David Vaughan who, on April 11, 2017 successfully defended a client at the Ontario Court of Appeal in the case of Fillmore v. Hercules.

Fillmore v. Hercules: What Happened

In the case of Fillmore v. Hercules SLR, the plaintiff, Fillmore, was terminated from his employment after 19 years and 3 months, at the age of 51.

On August 20, 2015 Fillmore was provided with two letters from his employer. The first confirmed that his position as Director of Purchasing was being eliminated as of August 24, 2015, and offered him 20 weeks of pay in lieu of notice as a result of this elimination (in exchange for a full and final release). He would be provided with 8 weeks’ notice as per the Employment Standards Act, 2000. in addition to 12 weeks’ of severance.

The second letter offered him a transition to a new position of Supervisor, to commence August 24, 2015. The position of Supervisor was a demotion and involved Fillmore accepting a reduction to his salary of more than 20%, although Hercules had advised that they would guarantee his Director-level salary for a period of 6 months if he elected to accept this offer. This offer of temporary salary extension was to “assist Fillmore in the transition from current role to new role.”

The date for accepting either offer passed, and Justice James Diamond found that both offers had expired by the time Fillmore contacted Hercules on August 25, 2015 to ask if he had now been terminated. In response, Hercules reiterated that the options as set out in the letters were still available to him, and that if Fillmore turned down the position of Supervisor, they would be proceeding with the termination.

Fillmore ultimately decided not to accept either offer, and instead moved forward with action for wrongful dismissal with the assistance of employment lawyers at Samfiru Tumarkin LLP.

Fillmore v. Hercules: Two Issues

Where Fillmore v. Hercules was concerned, there were two issues at play:

  1. The amount of severance pay owing to the plaintiff in common law notice, and
  2. Whether Fillmore’s alleged failure to mitigate damages should negatively impact the amount owing

Where the former issue was concerned, Partner Lia Moody successfully argued that, based on Bardal factors that are used to calculate severance pay, Fillmore was entitled to more reasonable 17 months of notice.

At the hearing, oral submissions centered on whether or not the defendant’s response on August 25, 2015, reiterating the two offers (i.e. of termination or the position of Supervisor) constituted the “clear opportunity” to mitigate Fillmore’s damages through a working notice period, as required by the Ontario Court of Appeal in Farwell v. Citair. That is, the basis of Hercules’ position in this case was that Fillmore failed to mitigate the damages that he sustained as a result of the termination of his employment on account of his failure to accept the position of Supervisor. Fillmore responding position was that he never had the opportunity to do so, as the offer to work in the position of Supervisor was never re-extended to him after his employment was terminated.

Fillmore v. Hercules: Justice Diamond’s Decision

Justice Diamond found in favour of Fillmore, finding that his former employer’s response on August 25, 2015 merely amounted to a reiteration of the choice the plaintiff was provided on August 20, and that the plaintiff was never provided with the clear opportunity to mitigate his damages after he refused to accept the demoted position. Justice Diamond found that, had Fillmore accepted the new position, Hercules would have argued that the plaintiff had forfeited his right to seek additional compensation.

The court also ordered the employer to pay costs.

Of particular note is the following line from Justice Diamond: “There is no obligation on the plaintiff to effectively risk handing the defendant a Full and Final Release through the back door and under the guise of mitigation efforts.

Summary

This decision is important because it reaffirms the ONCA finding that the duty to mitigate is not triggered unless the employer re-extends an offer to work out the notice period after the initial termination.

 

If you have any questions about this case or other aspects of employment law, don’t hesitate to contact Lia Moody, David Vaughan or Lior Samfiru or call 1-844-661-9065.

 

You can view the full citation here.

 

 

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