rejecting a new job offer wrongful dismissal severance package

Oftentimes, after an employee faces a wrongful termination or “constructive dismissal (a significant change to their employment terms), they may be presented with a new job offer. Sometimes, this new job offer comes from the same employer or a new potential employer. In these cases, many employees may not know that refusing such an offer of new employment has implications for the employee’s severance package and overall legal position when dealing with a wrongful dismissal claim or constructive dismissal claim.

In this employment law blog, we will delve into the complex interplay between job rejection, wrongful dismissal, constructive dismissal, and the employee’s duty of mitigation in Ontario employment law.

Understanding Wrongful and Constructive Dismissal

Before examining the consequences of rejecting a new job offer, it is essential to clarify the concepts of wrongful dismissal and constructive dismissal.

Wrongful Dismissal: occurs when an employer terminates an employee’s employment without providing reasonable notice or pay in lieu of reasonable notice (financial compensation in the form of a severance package).
Constructive Dismissal: occurs when an employer unilaterally makes unilateral changes to the employment contract so fundamental that it effectively amounts to a termination of the employment relationship.

The Duty to Mitigate

Despite an employer breaching an employment contract, whether through a wrongful dismissal or constructive dismissal, a fundamental principle in employment law is an employee’s duty to mitigate their financial losses. Basically, this means that a dismissed employee must take reasonable steps to find new employment to minimize their financial loss. If a suitable job offer is presented, the employee generally has a duty to accept it. However, the offer must be comparable to the previous position in terms of salary, benefits, and working conditions.

Rejecting a New Job Offer from the Same Employer

If an employee is offered a new position within the same company following a wrongful dismissal or constructive dismissal, the decision to decline the offer can impact their severance entitlement. Among other things, an employer will often argue that the employee unreasonably failed to mitigate their losses by refusing suitable employment.

However, several factors influence this determination:

Nature of the new position: if the new position is significantly different in terms of salary, benefits, responsibilities, or status, the employee may have a stronger case for rejecting it.
Reason for rejection: a valid reason for rejecting the offer, such as health concerns, remote geographic location, demotion, or childcare obligations, may mitigate the employee’s duty to accept.
Employee’s job search efforts: demonstrating a genuine effort to find alternative employment can strengthen the employee’s position.

Rejecting a New Job Offer from a Different Employer

Rejecting a job offer from a new employer generally the same impact on the employee’s entitlement to receive financial compensation when employment lawyers are negotiating a severance package, or to damages for wrongful dismissal in a court claim. The focus is on whether the employee made reasonable efforts to find comparable employment. Factors to consider include:

Salary and benefits: If the new job offer is significantly less lucrative, the employee may have a stronger case to prove it was reasonable to reject the opportunity.
Job duties and responsibilities: a job with substantially different duties or responsibilities can justify rejection.
Commuting distance: in 2008, the Supreme Court of Canada held in Evans v. Teamsters Local Union No. 31 that an employee is not obliged to return to working in an atmosphere of hostility, embarrassment or humiliation.
Hostile environment: unreasonable commuting distances can sometimes be valid reasons for declining an offer.

Employee’s Duty of Good Faith

While the employee has a duty to mitigate their losses, the employer also owes a duty of good faith and fair dealing in the manner of dismissal. This means that the employer must act honestly and fairly in dealing with the employee. If the new job offer is clearly inferior or made in bad faith, the employee may have a stronger case for rejecting it without affecting their severance package entitlement. As an employment lawyer in Toronto, I have sometimes responded to large employers attempting to intimidate an employee by offering them a job to return to the company in disingenuous circumstances where it was clearly made in bad faith as a tactical excuse to prove the employee failed to mitigate, including a job to which they do not qualify based on their skills and experience, or a job that would effectively result in a demotion if the employee accepted.

Impact of an Employee’s Decision to Reject a Comparable Job Offer on Severance Package

The decision to reject a new job offer can significantly impact the calculation of severance package or damages for wrongful dismissal. If a court finds that the employee unreasonably refused suitable employment, the severance package amount (period of reasonable notice) may be reduced or eliminated entirely. Conversely, if the employee can demonstrate that the offer was not comparable or that they made reasonable efforts to find alternative employment, their severance package entitlement may be protected.

Specific Examples

To illustrate these concepts, consider the following hypothetical scenarios:

Scenario 1: An employee is offered a demotion with a significant pay cut after being accused of misconduct (without just cause). The employee rejects the offer. In this case, the employee may have a strong argument for constructive dismissal, and their refusal to accept the demotion is less likely to impact their severance entitlement.
Scenario 2: An employee is offered a transfer to a remote location with no change in salary or benefits. The employee rejects the offer due to personal reasons, especially a long commute to and from work. This situation may be more complex, and the employee’s ability to demonstrate reasonable job search efforts will be crucial.

Evidence is Key

Regardless of the circumstances, documenting everything related to the job offer and the reason for rejection is crucial. This includes:

Correspondence with the employer regarding the new job offer
Detailed notes of conversations about the new position
Evidence of job search efforts
Documentation of any negative aspects of the new position

This evidence can be invaluable in supporting the employee’s position in potential legal proceedings.

Conclusion

The decision to reject a new job offer after wrongful dismissal or constructive dismissal is a complex one with significant legal implications. Employees should carefully consider their options and seek legal advice before making a decision. By understanding the duty to mitigate, the employer’s duty of good faith, and the general factors influencing the calculation of severance package, employees can better protect their legal rights and interests when it comes to receiving a fair severance package.

It is crucial to consult with an employment lawyer to assess the specific circumstances of your situation and determine the best course of action.

Book a Consultation with an Employment Lawyer in Toronto

At Bune Law, we understand and are familiar the complexities of workplace law and are committed to helping both employers and employees navigate these challenges. Whether you are an employer or employee dealing with employment contracts, workplace disputes like a wrongful dismissal or constructive dismissal, or simply need guidance on your rights and obligations for a severance package review and negotiation, our experienced employment lawyer is here to assist you.

Book a confidential consultation with our Toronto employment law firm to protect your legal rights to understand your options and protect your rights.

Why Choose Bune Law When You Need an Ontario Employment Lawyer?

Experience in all areas of workplace law, including wrongful dismissal claims, constructive dismissal claims, severance package reviews, severance package negotiations, discrimination and human rights disputes, and employment contract reviews.
Proven track record of successfully resolving workplace disputes through negotiation, mediation, and employment litigation.
Compassionate and personalized approach to each case, ensuring tailored solutions that meet your specific needs.

If you need a Toronto employment lawyer who is committed to delivering strong results and proactive solutions, please contact Bune Law online or by phone today at 647-822-5492.