Striking a Balance between Mitigating Damages and Protecting Employees in Evans v. Teamsters

This past Thursday marked the conclusion of Donald Evans’ five year struggle to obtain damages for his wrongful dismissal from the Teamsters Local Union No. 31, Evans’ employer of 23 years. In Evans v. Teamsters Local Union No. 31, 2008 SCC 20, a majority of the Supreme Court sided with both the Teamsters and the Yukon Court of Appeal, finding that by refusing to accept an offer to resume his employment for a term commensurate with the notice to which he was entitled, Mr. Evans failed to adequately mitigate the loss of income resulting from his dismissal.

In a post on Evans this past January, (here), I set out the facts in the case. Briefly, Mr. Evans was employed as a Business Agent of the Teamsters Local Union No. 31, located in Whitehorse. He was rather suddenly dismissed in the aftermath of a heated Union Executive election campaign, (during which he had fervently supported the unseated incumbent President). Following his dismissal, he received a letter from legal counsel for the Teamsters requesting that he “return to his employment [and] serve out the balance of his notice period of 24 months.” The letter further advised that failure to do so would be viewed by the union as just cause for a termination without notice. Mr. Evans agreed to return to work on the condition that the Union rescind its original letter of termination. A series of negotiations took place between Mr. Evans and the Teamsters that culminated in a statement. This led Mr. Evans to pursue a wrongful dismissal action. Although he was successful at trial, (2005 YKSC, 71), the Union successfully appealed to the Yukon Court of Appeal. (2006 YKCA 14). Determined to continue his legal battle, Mr. Evans sought leave to appeal to the Supreme Court.

The Supreme Court Decision

Writing for a majority of the Court, Bastarache J. (in what may be one of his last opinions) dismissed Mr. Evans’ appeal, finding that his refusal to resume working for the Union for the duration of his notice amounted to a failure to mitigate loss of income arising from wrongful dismissal. The lone dissent came from Abella J., who, drawing on the trial judge’s decision, suggested that only in the rarest of cases should returning to one’s former place of employment be required in order to mitigate the damages of a wrongful dismissal.

Although the majority and dissenting opinions relied on different authorities, (informed largely by their opposing conclusions as to the applicability of case law relating to mitigation of damages for constructive dismissal to cases involving wrongful dismissal), broadly speaking, both seem to stand for the proposition that in limited situations, an employer may require a dismissed employee to resume work as a means to mitigate damages arising from a loss of income instead of providing pay in lieu of notice.

Where the majority and dissent differed however, was in terms of their modus operandi for discerning whether or not it was appropriate for the Teamsters to request that Mr. Evans resume working at the union in order to mitigate the damages arising from his dismissal. In Bastarache J.’s view, “assuming there are no barriers to re-employment, … 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.” Drawing on Mifsud v. MacMillan Bathurst Inc. (1989), 70 O.R. (2d) 701 and Cox v. Robertson (1999), 69 B.C.L.R. (3d) 65, 1999 BCCA 640; he identified a number of objective criteria used to determine the presence of “barriers to re-employment,” including, (among others) whether the salary and working conditions remain the same, the absence of demeaning work or acrimonious personal relationships, (Misfud), and the history and nature of the employment (Cox).

Despite squarely endorsing an objective approach to ascertaining whether or not a terminated employee must resume working at his or her former place of employment to mitigate damages, Bastarache J. also seems to have left the door open for consideration of potentially subjective criteria. In addition to the objective factors, he explained, “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 … — be included in the evaluation.” In Evans, however, it does not appear that Bastarache J. gave much attention to ‘non-tangible’ considerations of this sort.

In her dissenting opinion, Abella J. criticized the majority’s use of an objective approach. Relying on Forshaw v. Aluminex Extrusions Ltd. (1989), 39 B.C.L.R. (2d) 140 (C.A.), she advanced a modified objective approach to determining whether or not a dismissed employee needed to resume working at his or her former workplace to mitigate damages. Forshaw, Abella J. explained, suggested that “the duty to ‘act reasonably’ in mitigating must be seen not just from the perspective of a reasonable person, but from the perspective of a ‘reasonable person in the dismissed employee’s position’.” Not unlike Gower J. of the Yukon Supreme Court, she suggested that there were serious problems with the objective approach advanced by both Bastarache J. as well as by the Yukon Court of Appeal. “The raw application of the remedial principle of mitigation in the way the Court of Appeal [and the majority] proposes,” she recognized, “has the danger of making routine the requirement to accept re-employment with an employer who acted wrongfully.”

Such a prospect, Abella J. explained, is fundamentally problematic because “it disregards the uniqueness of an employment contract as one of personal service.” Allowing an employer to effectively compel continued employment in the aftermath of a dismissal is tantamount to ordering specific performance of the employment contract. This, Abella J. asserted, flies in the face of “the legal principle that an employer will never be entitled to an order of specific performance.”

Comment

I am inclined to agree with Abella J. that the majority’s objective approach to determining whether or not barriers to re-employment exist discloses an inattention to the myriad of subjective experiences that can colour a person’s employment experience. “A court clearly cannot ignore the objective reality,” Abella J. admitted, “but neither can it disregard the employee’s subjective perceptions in assessing the reasonableness of the decision not to return to a workplace from which he or she has been unlawfully dismissed.”