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Employee who was “laid off” during recession was not required to return to same employer to mitigate damages

Jurisdiction: - British Columbia
Sector: - High Tech

Emmanuelle Renard ("Renard") was a valued with 12 years of service when her employer, Facet Decision Systems inc. ("Facet"), reluctantly laid her off in July 2009 because of the economic downturn.

Facet subsequently realized that it was not permitted to impose a layoff, and that the effect of a layoff was in fact a dismissal without cause. As such, a few months later, Facet offered to re-employ her in the same position.

Renard refused the offer of re-employment and instead commenced a wrongful dismissal lawsuit. Facet took the position that she had failed to mitigate her damages by not accepting her job back.

Court's Decision

Renard took the position that she was not required to return to Facet for three general reasons.

First, she argued that the relationship had broken down and become poisoned, making it impossible for her to continue working for Facet. The court rejected this argument, pointing to the following:

  • Renard had acknowledged in response to a question directly on point that the relationship was not poisoned.
  • the continuing respect between Renard and the CEO of Facet "was strikingly evident during their interactions" at the trial
  • the e-mail exchanges between the parties at the time of the dismissal and during the negotiation surrounding the offer of re-employment reflected the same respect. For example, the CEO repeatedly apologized for having to lay Renard off.
  • what was being offered to Renard was not a temporary position to enable her to mitigate her losses and in effect serve out the notice period until the termination. Rather, Facet made it clear that they wanted her back on a permanent basis.
  • the nature of the 12-year employment relationship, one that " was characterized by collegiality and cooperation."

Second, Renard argued that the type of work and the working conditions were different from those in her old position. The court, rejected this argument for the most part, finding that:

  • the offer of re-employment was for the same wage, the same position and the same work that Renard  had been doing prior to the termination
  • the reduction in staffing levels and changes in the nature of her work had occurred prior to her layoff, and/or were in alignment with the nature of work over the previous 12 years.

Finally, Renard argued that re-employment was too uncertain given the company's precarious financial situation. For example, payment of her salary would be contingent on keeping a key client and that client promptly paying its invoices.

Further, Facet been forced to change premises from large attractive offices, to a shared space with an office supply company and it was Renard's understanding that employees would also be required to work from home. Working from home was difficult for Renard because she had two young children who were home after school, had difficulty using the company's software programs remotely and needed the social aspect of a shared work space.

The court concluded that this was "a close case" but that, in the end, Facet had not proven that Renard had acted unreasonably and ailed to mitigate her damages when she refused the offer of re-employment.  As such, she was entitled to damages.

Notice Period

The court awarded Renard a 12 month notice period pointing to the fact that she: (1) was 39 years old at the time of her dismissal; (2) was dismissed in a poor economy, and (3) and was a highly skilled employee in a specialized area (she had been a "decision support analyst").The notice period was based on a salary of $90,000 per year.

Punitive/Aggravated Damages

Renard argued that she was entitled to punitive/aggravated damages on the basis of: (1) Facet's unlawful attempt to lay her off (2) the timing of the layoff just prior to her surgery and (3) Facet's advice to Employment Insurance that Renard had resigned, which briefly delayed receipt of her EI benefits.

The court rejected this argument.

Renard v. Facet Decision Systems Inc., 2010 BCSC 1908

Comment

In my post on January 22, 2011, I reviewed an article in The Advocate concerning the temporary layoff language in the BC Employment Standards Act ("ESA").

The authors of that article ("The Myth Of Temporary Layoff May Result In A Wrongful Dismissal Liability") are of the view that the language in the ESA could leave employers and employees with the false impression that employers have the right to impose temporary layoffs without facing liability for a constructive dismissal. As such, they are of the view that legislative reform is "absolutely necessary" to address this issue. 

Renard lends credence to the authors' concern that some employers in BC have a false impression that they can impose temporary layoffs on non-unionized employees, without being exposed to liability. There was, however, no mention of the ESA in the case.