An employee’s duty to accept a different position with employer to mitigate damages after being terminated from another position

Chandran v. National Bank of Canada, 2012 ONCA 205 deals with an employee's duty to accept a different position with their employer to mitigate damages after being terminated from another position. The decision refers to Evans v. Teamsters Local Union No. 31 [2008] S.C.J. No. 20 in which the Supreme Court of Canada stated that "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 Court continued "the critical element is that an employee –not [be] obliged to mitigate by working in an atmosphere of hostility, embarrassment or humiliation' …Thus, although an objective standard must be used to evaluate whether a reasonable person in the employee's position would have accepted the employer's offer…it is extremely important that the non-tangible elements of the situation – including work atmosphere, stigma and loss of dignity, as well as nature and conditions of employment, the tangible elements – be included in the evaluation."

The Court in Chandran holds:

[4]              After a meeting with Chandran to discuss the employee complaints, the bank sent him a disciplinary letter setting out the behaviour that provoked the complaints, informing him that he would be relieved of his supervisory duties, and providing him with two possible reassignment options (same salary and level, but without supervisory responsibilities). 

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[5]              Chandran did not accept either offer.  He left the bank and after 14 months found employment with another bank.
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[9]              The bank contends that the trial judge erred by concluding that Chandran was not required to mitigate his damages by accepting one of the positions offered by the bank.

[10]         We disagree.  The leading case dealing with an employee's duty to accept a different position with his employer to mitigate his damages after being terminated from another position is Evans v. Teamsters, Local 31, 2008 SCC 20.  In Evans, Bastarache J. stated that a finding by a trial judge that an employer did not meet its burden of proving that a dismissed employee should have accepted an offer of re-employment is a finding of mixed fact and law and is, therefore, subject to appellate intervention only if there is a palpable and overriding error in the trial judge's finding.

[11]         The bank cannot clear this high hurdle in this appeal.  The trial judge considered the factors relevant to mitigation enumerated in Evans.  She held that the factors that gave rise to the constructive dismissal (a finding, we note, that the bank does not appeal) – the imposition of "serious discipline" on Chandran and the serious findings of misconduct – led her to conclude that, viewed objectively as required by Evans, Chandran would have been subjected to, again as per Evans, "an atmosphere of embarrassment or humiliation" as well as a real fragility in his continuing employment with the bank.  Accordingly, it simply cannot be said that the trial judge's ultimate conclusion that Chandran "did not therefore have a positive duty to accept the offers" amounts to a palpable and overriding error.