In the recent decision of Chandran v. National Bank of Canada
, the Ontario Court of Appeal provided clarity on whether an employee is required to stay with his/her employer in order to mitigate his/her damages after being constructively dismissed.
The Court of Appeal ruled that where the workplace might be perceived as humiliating or embarrassing, employees are not required to stay with their employers to mitigate their damages.
Chandran was a senior manager at the National Bank and had eleven employees reporting directly to him. The bank conducted a survey asking employees about Chandran’s behaviour. The results of the survey indicated that Chandran was at times a bully and that he embarrassed people. As a result of these findings, the bank demoted Chandran from his supervisory position and offered him two different positions, each of which provided Chandran with a similar rate of pay and level within the organization, but did not include any supervisory responsibilities.
Chandran successfully claimed that he had been constructively dismissed. The bank did not appeal the finding that it had constructively dismissed Chandran, but did argue that he was still required to accept one of the two positions that the bank had offered him in order to mitigate his damages. The Court of Appeal rejected the bank’s argument on the basis that, given the serious discipline that had been imposed (i.e. being stripped of supervisory duties and being offered lesser positions), the workplace would have been embarrassing and humiliating for Chandran.
So, what does this mean for employers? First, when conducting workplace investigations (or in this case, a survey), employers must be able to demonstrate due diligence and good faith in their investigation efforts. For example, employees that are being investigated ought to be given an opportunity to respond to the allegations and, depending on the findings, employers ought to provide the employee with a warning and an opportunity to improve as opposed to taking some more serious form of discipline. Second, when imposing disciplinary measures, employers must be cognizant that a change of position may create an atmosphere of hostility, embarrassment or humiliation, such that the employee will not be required to accept the position in order to mitigate his/her damages.