Williams HR Law LLP


August 20, 2012

[vc_row][vc_column width=”1/3″][vc_single_image image=”2285″ img_size=”full”][/vc_column][vc_column width=”2/3″][vc_column_text]In a recent blog, we reported the decision in Ghanny v. 498326 Ontario Limited which involved the court finding that an employee’s duty to mitigate may include taking a job that is offered by the dismissing employer. As a solid illustration of the evolving law in this area, we now report on a recently-issued decision in Chandran v. National Bank of Canada that provides further guidance for employers. In Chandran, the Ontario Court of Appeal unanimously upheld the trial court’s decision that the mitigation duty for an employee to accept a job from the dismissing employer does not include jobs that would represent a demotion such that the employee would be subjected to embarrassment or humiliation.

Chandran was an 18 year employee of the Bank who, at the time of dismissal, held the position of Senior Manager, which involved supervising 11 employees.  A survey conducted by the Bank revealed that nine of the 11 employees had complaints about Chandran including his condescending remarks, bullying behaviour and humiliation of employees in front of others.

Upon reviewing the survey results, the Bank sent Chandran a disciplinary letter which set out his disrespectful behaviour that had provoked the employees’ complaints.  In the letter, Chandran was informed that he would be relieved from his supervisory role and provided two possible reassignment options.  Both positions were comparable to his Senior Manager role but lacked all supervisory responsibilities.  Chandran did not accept either reassignment offer.  Instead, he resigned from the Bank and obtained employment with another institution. He then brought an action for constructive dismissal against the Bank.

The trial judge’s opinion was that Chandran would have been subjected to an atmosphere of embarrassment or humiliation, had he accepted either of the positions offered to him, which were not “equal” to the one he had held prior to his dismissal.  As such, consistent with constructive dismissal principles, the trial judge’s conclusion was that Chandran did not have a duty to accept either of the demotion offers.

 Significance for Employers:

A strategy that can be implemented by employers, where appropriate, is to provide an employee whose employment in a particular position is being terminated with the option to accept an alternative position within the organization.  This can result in cost-savings for employers because an employee who may assert that they have been wrongfully dismissed has a duty to mitigate or minimize their losses through securing alternate employment.  Where an employee has the opportunity to accept an alternative position to mitigate their losses and does not take that opportunity, a court in a wrongful dismissal claim may reduce any award made to that employee accordingly.

What employers are reminded of by Chandran however, is that an employee will not be obligated to accept a position if the Court views the alternative position as a demotion.  The analysis considers all aspects of the employment relationship and contextual factors within which the offer occurs.  As such, employers are advised to seek legal assistance to minimize the likelihood of a misstep and to ensure that an employee’s rejection of an alternative position will constitute a failure to mitigate.


This blog is provided as information and a summary of workplace legal issues.

This information is not intended as legal advice.