Summary
A recent decision from the Alberta Court of Appeal provides helpful guidance on the employee’s duty to mitigate in the context of a constructive dismissal and commentary on the consideration of whether an employee has, in fact, mitigated their damages. This article explores the Court’s reasoning and offers key takeaways for employers navigating similar issues in wrongful dismissal claims.
Alternate Offers of Employment and the Duty to Mitigate
In Gugulyn v. Alberta, 2026 ABCA 68, the Alberta Court of Appeal reviewed a trial judge’s finding that an employee failed to fully mitigate his damages after he was constructively dismissed. The trial judge concluded that the employer, the Government of Alberta, constructively dismissed the employee after he was advised that he would be transferred to a different position that required education and experience that he did not have. The trial judge determined that the employee was entitled to a 23-month notice period, but he would have found a comparable position if he properly mitigated his losses within 17 months of his constructive dismissal.
On appeal, the employer argued that the employee completely failed to mitigate in not accepting the transfer to the different position. The Alberta Court of Appeal reviewed the test from Evans v Teamsters Local Union No 31, 2008 SCC 20, to determine if it was reasonable for the employee who was terminated to return to work for the same employer by considering relevant factors:
[6] …the assessment is objective and multi-factored. Among the relevant factors are whether the salary is the same, the working conditions are not substantially different, the employee has commenced litigation, and the offer was made before or after the employee left. A critical factor is whether the employee would be returning to work in an atmosphere that is hostile, embarrassing or humiliating…
The Alberta Court of Appeal rejected the employer’s argument and concluded that the trial judge correctly applied the test in finding that the work environment would have been intolerable for the employee. Namely, the employee already informed the employer that he was seeking damages for constructive dismissal, and he would have been working under the same supervisor in his new position, although their relationship was strained before the dismissal. Finally, the employer implemented the transfer in a manner that undermined the trust between the employee and the employer. As a result, the employee was not obliged to accept the alternate position with the same employer to mitigate his losses.
Securing Alternate Employment During the Notice Period
The Alberta Court of Appeal also considered the trial judge’s finding that the employee did not mitigate his losses to find suitable alternate employment and could have found an alternative position 17 months into the notice period. In particular, the employee argued on appeal that the employer did not demonstrate that the employee would have secured alternative employment in this time frame.
On this issue, the Alberta Court of Appeal found that the trial judge was open to draw factual inferences based on the employee’s qualifications, skills, and job postings that were put into evidence. Notably, the Court also clarified that the employer was not required to adduce evidence from recruitment experts to make a successful mitigation argument.
Takeaways
This decision suggests that, in cases where a terminated employee is offered alternate employment by the same employer, the employee will not necessarily be obligated to accept the offer to fulfill their duty to mitigate. Gugulyn v Alberta confirms that Courts will apply a number of factors including salary, working conditions, and any ongoing litigation between the parties. Ultimately, the Court will ask whether a reasonable person in the employee’s position would have accepted the position in the circumstances.
This decision also confirms that employers will not necessarily be asked to present expert evidence to make out a mitigation argument in a wrongful dismissal suit. Instead, employers may be better suited by adducing evidence on comparable job postings and advocating for factual inferences to be made based on the job descriptions and the employee’s qualifications and experience.
Need More Information?
For more information or assistance with terminations and wrongful dismissal claims, contact Naomi Santesteban at nsantesteban@filionlaw.com or your regular lawyer at the firm.