Judge Rules for Plaintiff in Important Termination Case

A noteworthy case was recently won by Samfiru Tumarkin concerning demotion and offer re-extension after termination.

The Plaintiff was terminated from his employment after 19 years and 3 months. On August 20, 2015, he was provided with two letters from his employer – one that 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), and the other that offered him a transition to a new position of Supervisor, to commence on August 24, 2015. The position of Supervisor was a demotion and involved the plaintiff accepting a reduction to his salary of more than 20% – although, the defendant had advised that they would guarantee his Director-level salary for a period of 6 months if he elected to accept this offer.

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

At the hearing, oral submissions centered on whether or not the defendant’s response on August 25, 2016, reiterating the two offers (i.e. of termination or the position of Supervisor) constituted the “clear opportunity” to mitigate his damages through a working notice period, as required by the Ontario Court of Appeal in Farwell v. Citair. That is, the basis of the defendant’s position in this case was that the plaintiff 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. The plaintiff’s responding submission was, essentially, 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.

Justice Diamond found in favour of the plaintiff, finding that the defendant’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 he accepted the new position, the defendant would have argued that the plaintiff has forfeit his right to seek additional compensation. 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”.

In summation, this decision is important because it re-affirms 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 Lior Samfiru at Lior@stlawyers.ca or call 1-844-661-9065.