Written by: Kelly Lanyi-Bennet and Ranzell Ortega When an employee asserts that they have been constructively dismissed, it is not always clear what the next steps should be for either the employee or the employer. Specifically, there can be some confusion about when an employee must mitigate their loss of employment income by returning to the same position or with the same employer, especially if events have occurred that seem to make returning unreasonable. In this article, we review what constructive dismissal is, an employee’s duty to mitigate their losses, and whether that duty includes returning to the same position that they previously held, or the same employer. Overall, an employee may be required to return to the same position with the same employer depending on the circumstances, if it is deemed objectively reasonable. Courts have found that it is objectively unreasonable to expect an employee to return if the work environment is hostile and returning would cause embarrassment. If the salary is the same, the working conditions are not too different, the work is not demeaning, and the personal relationships are still respectful, then an employee would most likely be obligated to mitigate their loss of income by remaining with their employer. What is Constructive Dismissal? The Supreme Court of Canada (the “SCC”) has indicated that constructive dismissal occurs when an employer decides, unilaterally, to make substantial changes to the essential terms of an employee’s contract of employment without providing reasonable notice of that change (Farber v Royal Trust Co, 1997 CanLII 387 at para 24). What is the Duty to Mitigate? An Ontario Court of Appeal case (Mifsud v MacMillan Bathurst Inc, 1989 CanLII 260 (ONCA)) defined the duty to mitigate as a duty to take reasonable steps to avoid an accumulation of loss. If reasonable steps aren’t taken, courts generally reduce the damages a plaintiff receives (Mifsud at para 12). This duty applies to all wrongful dismissals, which includes constructive dismissals. In certain situations, it would be unreasonable for the employee asserting constructive dismissal to not remain in their current employment to mitigate their damages. This was confirmed in a SCC case, Evans v Teamsters Local Union No 31, 2008 SCC 20. In that case, the terms of employment were the same and the work relationship was not seriously damaged, so it was not objectively unreasonable for the plaintiff to return to work to mitigate his losses (Evans at para 50). However, as confirmed by the Alberta Court of Appeal (Magnan v Brandt Tractor Ltd, 2008 ABCA 345), if there is a breakdown in the employer/employee relationship, it can be unreasonable to expect an employee to return to the same place of work. In addition, if an employer makes unkind comments about an employee’s character and work performance following their assertion of constructive dismissal, then the employee may be able to establish that they were not required to mitigate by remaining with the same employer, given the impact on the employment relationship. What does this mean for employers and employees? So – does the constructively dismissed employee have to stay? The answer to this question, as is the case with most legal questions, is, it depends. Each situation will be different but in general, if the work environment is respectful, remaining employed would not cause embarrassment, and the position offered is not a demotion, then an employee would likely be required to return to their employment, at least until they are able to find alternative employment. However, as explained above, if circumstances result in a breakdown in the employer/employee relationship and turn the workplace into a hostile environment for the employee, it would be unreasonable to expect the employee to mitigate their losses after asserting constructive dismissal by returning to the same position and employer. If you are unsure about your options and obligations in relation to a constructive dismissal, one of our Labour and Employment team members would be happy to help you navigate this legally complex area. Disclaimer: This article is to be used for educational and non-commercial purposes only. Parlee McLaws LLP does not intend for this article to be a source of legal advice. Please seek the advice of a lawyer before choosing to act on any of the information contained in this article.