Mitigating a termination is one of those thorny issues that just got more thorns.

Generally, upon termination an individual is expected to mitigate the loss by finding alternative work to make up for the present employment loss. Probably the last place that you would want to do that is with your present employer. Having said that, the situation can, at times, be advantageous to both parties: employees about to attain “former” status can apply for another job without the dismissal stigma and employers can transition to the new status with a reduced productivity loss.

Well, following Evans v. Teamsters Local Union No. 31, 2008 SCC 20, the terminating employer is now one of those places that can be considered in the mitigation formula. On termination, under the right circumstance, a failure to accept continued employment, or re-employment, may be viewed as a failure to mitigate.

In the headnote:

In some circumstances it will be necessary for a dismissed employee to mitigate his or her damages by returning to work for the same employer. Assuming there are no barriers to re‑employment, requiring an employee to mitigate by taking temporary work with the dismissing employer is consistent with the notion that damages are meant to compensate for lack of notice, and not to penalize the employer for the dismissal itself. Not imposing such a requirement would create an artificial distinction between an employer who terminates and offers re‑employment and one who gives notice of termination and offers working notice. [28‑29]

The employer bears the onus of demonstrating both that an employee has failed to make reasonable efforts to find work and that work could have been found. Where the employer offers the employee a chance to mitigate damages by returning to work for the employer, the central issue is whether a reasonable person would accept such an opportunity. A reasonable person should be expected to do so where the salary offered is the same, where the working conditions are not substantially different or the work demeaning, and where the personal relationships involved are not acrimonious. Other relevant factors include the history and nature of the employment, whether or not the employee has commenced litigation, and whether the offer of re‑employment was made while the employee was still working for the employer or only after he or she had already left. The critical element is that an employee not be obliged to mitigate by working in an atmosphere of hostility, embarrassment or humiliation. Although an objective standard must be used to evaluate whether a reasonable person in the employee’s position would have accepted the employer’s offer, it is extremely important that the non‑tangible elements of the situation — including work atmosphere, stigma and loss of dignity — be included in the evaluation. [30]

I would think that the situation that would allow continued employment following termination would have to be few and far between:

Terminator: “Hi, you are gone because we don’t need you anymore and to make it less expensive for us please accept continued employment with us.”

Terminatee: “Okay that sounds just super, can I take you out for a beer to celebrate?”

Terminator: “Wow, what a sport, for a minute there I thought I was going to have to fire you.”

The Court speaks to the point:

[33] In sum, I believe that although both constructively dismissed and wrongfully dismissed employees may be required to mitigate their damages by returning to work for the dismissing employer, they are only required to do so where the conditions discussed in para. 30 above are met and the factors mentioned in Cox are considered. This kind of mitigation requires “a situation of mutual understanding and respect, and a situation where neither the employer nor the employee is likely to put the other’s interests in jeopardy” (Farquhar, at p. 95). Further, the reasonableness of an employee’s decision not to mitigate will be assessed on an objective standard.

While I suppose that the argument makes sense on an intellectual level, I imagine there will be a number of terminated individuals that will not understand the finer points of this legal development.