Ontario courts have mentioned time and time again that a terminated employee has a duty look for and accept comparable employment.
What happens when your employer is sold and the purchaser offers you employment?
A recent decision from the Ontario Superior Court of Justice provides some direction on when such an offer of employment can be rejected.
Dussault v. Imperial Oil Limited, 2018 ONSC 1168
Mr. Dussault and Ms. Pugliese both worked in management positions for Imperial Oil Ltd. (“Imperial”). At the time of termination, Mr. Dussault had been employed for 39 years and Ms. Pugliese for 36 years.
In 2016, Imperial held a meeting where it shared plans to sell its retail business in Ontario to Mac’s Convenience Stores Inc. (“Mac’s”) and that many of its current employees would be offered jobs with Mac’s.
Both Mr. Dussault and Ms. Pugliese were offered positions with Mac’s. These offers were conditional upon both employees signing releases in favour of Imperial. The new offer stated that Mr. Dussault’s and Ms. Pugliese’s respective base salaries would remain the same for 18 months but their salary after this time was not revealed. Further, there was an explicit term where Mac’s would not recognize the decades of experience with Imperial.
If these offers of employment were accepted, Mr. Dussault and Ms. Pugliese would receive a lump-sum payment to make up for the reduction in value of their benefit plans. Imperial stated that the amount of this lump-sum payment would only be disclosed after they resigned from Imperial, accepted Mac’s job offer, and signed a release in favour of Imperial.
Both employees rejected Mac’s offer of employment as their terms of employment with Mac’s would be less favourable. Mr. Dussault was 63 years old and Ms. Pugliese was 57 years old when Imperial terminated their employment in 2016.
Justice Favreau concluded that Mr. Dussault and Ms. Pugliese did not have an obligation to accept employment from Mac’s to mitigate their damages. In coming to this conclusion, Justice Favreau first focused on the fact that Mac’s offer of employment was presented before employment with Imperial was terminated. Next, he decided it was not reasonable for the employees to accept Mac’s offers as Imperial imposed a requirement that a release be signed in order for the employees to receive their lump-sum payment. Justice Favreau viewed the requirement for the employees to surrender their right to sue Imperial as fatal.
Justice Favreau also found the requirement for the employees to accept an offer of employment that did not recognize their years of service with Imperial to be unreasonable. Finally, he found sufficient differences in Mac’s offer of employment that it was reasonable for the employees to reject the offer. Notably, there were issues surrounding a reduction in both benefits and salary.
In addition, Justice Favreau found that both employees were entitled to a whopping 26 months’ notice based on the exceptional circumstances of their respective cases.
Takeaways for Employees
- A terminated employee’s duty to mitigate does not require the person to accept employment with a purchaser of the business where that offer would significantly and negatively affect them going forward
- A requirement for employees to accept an offer of employment that fails to recognize their years of service with the former employer is likely unreasonable
- The timing of when the new employer offers a job is relevant; it is unreasonable to expect employees to start looking for alternative employment before they have had the chance to consider the new offer of employment
If you are being offered a new job in the context of a sale of your employer’s business, it is important to contact an employment lawyer to understand your duties and rights.
If you have questions or would like more information, you can contact an employment lawyer at MacLeod Law Firm. You can reach us at [email protected] or 647-204-8107.
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