Canadian Employment Law Today

Canadian Employment Law Today | 3 Cases and Trends Canadian HR Reporter, a Thomson Reuters business 2019 Failure to accept recall offer cuts down long-term worker's constructive dismissal damages Employer had no right to temporarily lay off long-time employee, but employee's refusal of reasonable offer 4 weeks later was a failure to mitigate damages BY JEFFREY R. SMITH AN ONTARIO company constructively dismissed a 23-year employee when it tried to temporarily lay him off, but only has to pay the employee four weeks' wages be- cause the employee didn't accept a recall that would have been a reasonable mitiga- tion of his damages, the Ontario Superior Court of Justice has ruled. David Gent, 56, was hired as a carpenter in May 1992 by Strone, a company that does emergency restoration and remediation work for residential, commercial, indus- trial, and municipal properties in Toronto. Gent was eventually promoted to health and safety training specialist. Gent's duties as a health and safety train- ing specialist included training employees at Strone's head office and other locations, developing training materials, performing safety audits on Strone's processes, liais- ing with the Ontario Workplace Safety and Insurance Board, and chairing the com- pany's joint health and safety committee. He worked mostly in the head office and occasionally visited client worksites but his role didn't require any management or su- pervisory responsibilities. In 2014, Strone's business took a signifi- cant downturn and the company decided to permanently lay off 22 employees with severance packages. e layoffs took place in January 2015. Later in the year, Strone decided to per- manently lay off additional employees and temporarily lay off certain employees who had long-term service and skillsets that the company could use after recalling. On Oct. 15, 2015, Gent was told that he was being temporarily laid off due to the decrease in business. He was also told he would be recalled back to work as soon as possible and in the meantime, Strone would pay his group benefits premiums. Since the length of the layoff was unknown, Gent had to re- turn all company equipment he had in his possession, but was asked to keep Strone informed about his availability and contact information. After his layoff meeting, Gent emailed Strone's vice-president with his contact information and said, "I am available every day as always." Four days later, he emailed again to say he was available for work every day that week. Five days after Gent's layoff, on Oct. 20, a major hotel hired Strone to repair sig- nificant damage. Company management discussed recalling Gent for this project, as he often worked on large jobs, but the com- pany didn't yet know the scope of the job so it held off until it had more information. However, Gent contacted Strone on Oct. 27 and informed the company through legal counsel that he considered his tem- porary layoff to be constructive dismissal. Strone responded that it might be able to recall him and it would let him know by Nov. 9, but Gent said he felt the employ- ment relationship had "broken down" and he wouldn't return to work with Strone. Strone sent a letter to Gent's legal coun- sel on Nov. 10 recalling Gent to "active em- ployment," saying the hotel job involved issues with asbestos and mould, for which Gent was trained to handle. It asked if Gent would return to work for this job, but Gent again refused, later claiming that the offer "was a sham made only in response to his litigation and not a bona fide attempt to re- turn him to work." Gent proceeded with a constructive dis- missal claim against Strone, arguing that it would have been "embarrassing and degrad- ing to return to work" when Strone made the recall offer. He also claimed there was no employment term giving Strone the right to temporarily lay him off without his consent. Strone argued that Gent agreed to the layoff when he followed up twice providing his availability to work and, if it was con- structive dismissal, he failed to mitigate his damages when he refused the company's recall offer. e court found there was no evidence that there was a term of employment allow- ing Strone to temporarily lay Gent off. Gent wasn't a unionized employee subject to a collective agreement with layoff privileges, and neither was there an employment con- tract providing for layoffs. e fundamen- tal term of employment in the relationship was that Strone provide Gent with work and compensation; trying to temporarily lay him off was a significant alteration of Gent's employment, said the court. e court also found that Gent's advis- ing of his availability wasn't enough to con- clude he agreed to such a significant change to his employment, as there was no formal agreement. Gent's knowledge of Strone's business difficulties also didn't justify the change, the court added. e court determined Strone construc- tively dismissed Gent on Oct. 15, 2015, when it informed him of the temporary layoff. However, the court agreed with Strone's assertion that Gent's refusal of its recall offer was a failure to mitigate his damages and, as a result, a lessening of Gent's damages in lieu of reasonable notice was warranted. e court noted that Gent had no pre- vious issues with his workplace and had a good working relationship with Strone — he put in more than 23 years with the company. e company continued his benefits payments and repeatedly advised him to stay in contact with it, so Gent was aware the intention was to recall him at some point. And the company did try to recall Gent to his same position and under the same terms of employment, but it hap- pened after Gent had started constructive dismissal litigation — Gent refused to even consider the offer, which didn't make sense given the lack of evidence there would be any problems or negative impact on Gent if he returned. "I am of the view that a reasonably objec- tive individual in his circumstances would not have concluded that returning to work would be too embarrassing, humiliating, and/or degrading," the court said. "I find that it is reasonable to conclude that Mr. Gent's position that the fact that he had been 'temporarily laid off' led to the total breakdown of the employment relationship between the parties, was not supported by the evidence and was not a conclusion that a reasonable person would reach." e court found that had Gent would have been entitled to a notice period of 18 months' pay as damages for constructive dismissal, given his length of service with Strone. However, since Strone made a rea- sonable offer of re-employment when it tried to recall him, the company was only ordered to pay him damages for the time of his layoff to the time of the recall — just under four weeks' pay equalling $4,846.50. For more information see: • Gent v. Strone Inc., 2019 CarswellOnt 116 (Ont. S.C.J.). The worker claimed the recall offer 'was a sham' and not a bona fide attempt to return him to work

• Cover