Bunker v. Georgetown Chrysler (1993) Ltd. – Ontario Superior Court of Justice – July 27, 2009
If a terminating employer makes an offer of continued employment, the employee will not be considered to have failed to mitigate their damages by making a counter proposal rather than accepting the employer’s initial offer.
The recent decision by the Ontario Superior Court of Justice on July 27, 2009 in Bunker v. Georgetown Chrysler (1993) Ltd. [2009] O.J. No. 3912 (“Bunker”) provides that an employer may not be able to claim that a terminated employee has failed to fulfill their duty to mitigate by not accepting the employer’s initial offer of continued employment, but instead responded to the employer’s offer with their own proposal of continuous employment.
In Bunker, the employee was employed by the employer from May 9, 2005 until September 30, 2008 when he was terminated without cause. Following his termination, the employee was offered continued employment with the employer. The employee responded to the offer by providing his own proposal which would have tripled the employee’s daily salary. The employer did not find this to be a reasonable proposal and made no counter-offer. Subsequently, the employee commenced a claim for wrongful dismissal seeking nine months notice.
At trial, the employer claimed that the employee failed to mitigate his damages by not accepting the employer’s offer of continued employment, but instead offering an unreasonable proposal. The employer further claimed that if the employee had made a reasonable proposal, the employer would have accepted and the employee would have mitigated his damages. The Court, however, concluded otherwise.
The Court stated, “Had the [employer] wished to pursue a mitigation strategy, they could have easily made a counter offer to [the employee’s] proposal that was more in line with [the employer’s defence counsel’s] suggestion to the litigation. While it is the responsibility of [an employee] to mitigate, it is, from the human perspective, not surprising that [the employee] aimed high perhaps out of a bit of anger. Since [the employer] did not enter into further discussion, I find that the [employer is] not now able to criticize [the employee] for refusing to pursue them.”
With mitigation being such a crucial element of all wrongful dismissal matters, the decision that the Court reached in Bunker with respect to an employee’s duty to mitigate is extremely important for both employees and employers. This decision provides further insight into the Supreme Court of Canada’s decision on Evans v. Teamsters Local Union No. 31, which established that for an employee to fulfill their duty to mitigate, the employee may have to accept an offer of temporary reemployment with the terminating employer. Expanding on this decision, Bunker provides that an employee is not failing to fulfill their duty to mitigate if the employee makes a proposal to their terminating employer regarding continued employment instead of accepting the employer’s initial offer of continued employment. Even if the employee’s proposal is unreasonable, the employee will not be held to have failed to fulfill their duty to mitigate. An employer is only able to claim that the employee has failed to fulfill their duty to mitigate if the employer “enters into further discussion” with the employee regarding continued employment and the employee ultimately refuses to return to work for mitigation purposes.
This decision is noteworthy for both employees and employers. An employee should be aware of this ruling so that they understand that they may not have to immediately accept a terminating employer’s initial offer of continued employment. Rather, the employee may be able to make a proposal of their own regarding continuous employment and not have to worry that by making such a proposal, and thereby not accepting the employer’s initial offer, they will be held as failing to fulfill their duty to mitigate.
Similarly, Bunker provides that an employer should not act too hastily in claiming that an employee who has not accepted an offer of continued employment after termination, but rather provided the employer with their own proposal, has failed to fulfill their duty to mitigate. Instead, the employer should attempt to enter into further discussions with the employee, perhaps by way of a counter offer to the employee’s offer, in attempts to reach an agreement regarding further employment. If the employer does not provide a further opportunity to reach an agreement on the matter, then the employer may run the risk of not being able to reasonably claim that the employee failed to fulfill their duty to mitigate.