In Richardson v New West Freightliner Inc, 2025 ABCJ 141, the Court concluded that it was not objectively unreasonable for the employee to return to work:
- Because the plaintiff refused the reasonable re-employment offer, he failed to mitigate his damages.
- As a result, his wrongful dismissal claim was dismissed and he was not awarded severance damages.
Key Facts
- Employment and Termination: The plaintiff, Richardson, was a 73-year-old unlicensed mechanic who had worked for nearly 20 years at New West Truck Centres (the defendant). In October 2023, amid a slowdown in work, he asked about the possibility of a layoff. The employer instead treated this as a hint at retirement and provided a termination letter giving him three months of working notice (initially framed as “working notice of retirement,” then corrected to a termination notice). Richardson worked through the notice period until his last day in mid-January 2024.
- Actions at End of Employment: Expecting his job to end, Richardson advertised and sold his personal work tools by his final day. The company even held a retirement send-off for him, although Richardson maintained that he was not truly retiring and had only inquired about a temporary layoff.
- Offer of Re-Employment: A few weeks after his termination, Richardson, through a lawyer, expressed dissatisfaction with how his employment ended. In March 2024, the employer responded by offering to re-employ Richardson in his former position under the same terms and conditions as before. The offer included paying him for the wages he lost in the interim, and it had no fixed end-date; however, it was conditional on Richardson signing a release of any claims against the company. The employer’s evidence was that this was a sincere offer and that Richardson would be welcomed back despite having sold his tools.
- Refusal of Re-Employment: Richardson chose not to accept the re-employment offer. He later testified that, although he was initially excited by the idea, he was concerned he would have to invest in buying new tools and feared the employer might just terminate him again shortly due to the lack of work. Notably, he did not ask the company whether they would assist with tools or whether his job security could be ensured, even though a tool allowance existed. The court found that Richardson’s reasons for refusing to return were unsupported assumptions he made without checking with the employer.
- Lawsuit: Richardson sued for wrongful dismissal after rejecting the offer. He claimed that the three-month notice was insufficient given his age and long service, seeking common law reasonable notice (he argued for roughly 21 months’ severance pay) and also claimed aggravated damages for alleged bad faith in the manner of his termination. The employer defended the claim by arguing that it had provided adequate notice and, crucially, that Richardson had failed to mitigate his damages by unreasonably refusing the offer to come back to work.
Legal Issues
- Reasonable Notice vs Wrongful Dismissal: Whether New West Truck Centres had wrongfully dismissed Richardson by giving only three months’ working notice, or if a much longer reasonable notice period (as claimed by Richardson) was warranted given his nearly 20-year tenure and age. This issue encompasses whether the employer met its obligation to provide reasonable notice of termination or pay in lieu thereof.
- Failure to Mitigate Damages: Whether Richardson failed to mitigate his damages by declining the employer’s offer of re-employment. In particular, the court had to decide if a reasonable person in Richardson’s position should have accepted the offer to return to work, thereby reducing or eliminating any damages for wrongful dismissal.
- Aggravated Damages: Whether the circumstances of the termination — including the “retirement” notice miscommunication and the employer’s conduct — amounted to bad faith or unfair dealing warranting aggravated damages. Richardson’s claim for aggravated damages put in issue if the employer’s actions in termination (and in the re-employment offer) were conducted in a manner that was unfair or egregious.
Court’s Reasoning and Application of Legal Principles
- Notice and Good Faith: The Court first addressed the context of the termination. It noted that Richardson’s termination was precipitated by his own inquiry about a layoff, and the three-month working notice provided was above the statutory minimum required by employment standards. The employer had continued to pay Richardson’s full wages during the working notice period even when business was slow, and there was no evidence of malice or deceit in the termination process. These facts indicated the employer acted in good faith, undermining Richardson’s claim that the termination was conducted in bad faith. As a result, the Court found no basis for awarding aggravated damages, since nothing in the employer’s conduct met the high threshold of unfair dealing required for such damages.
- Mitigation Principle (Evans v Teamsters): The central issue became Richardson’s duty to mitigate his losses. The Court relied on the principle from the Supreme Court of Canada’s decision in Evans v Teamsters Local 31 (2008) that “in the absence of conditions rendering the return to work unreasonable, on an objective basis, an employee can be expected to mitigate damages by returning to work for the dismissing employer.” In other words, if an employer offers a terminated employee their job back on comparable terms and there are no hostile or untenable conditions, a reasonable employee should accept that offer to reduce their damages. An employee is not required to return in every case – the test is whether a reasonable person in the employee’s position would have accepted the re-employment opportunity, considering factors like whether the salary and duties are the same, whether the work environment would be humiliating or hostile, and whether there are any other objective barriers to returning. The Court emphasized that an employee need not mitigate by working in an atmosphere of hostility, embarrassment, or loss of dignity, but absent those kind of factors, returning to the same job can be a reasonable way to mitigate.
- Offer Was Objectively Reasonable: Applying these principles, the Court examined the specifics of New West’s re-employment offer. It found that the offer to return was genuine and essentially unconditional (apart from the release of claims, which the Court did not view as creating hostility) and that it was for the same position, responsibilities, location, and pay that Richardson had before. There was no evidence of animosity or acrimony in the relationship – in fact, management was unanimous that Richardson would be welcomed back and there were friendly overtones (recall that a retirement party had occurred on good terms). The judge determined that there were no objective barriers to Richardson resuming work there. In the court’s words:
“the terms of the re-employment offer were the same as his previous employment, there was no atmosphere of hostility or animosity, and it was not objectively unreasonable for the Plaintiff to return to work for the Defendant to mitigate his damages.”
- Employee’s Reasons Dismissed: The Court gave careful consideration to Richardson’s stated reasons for refusing the offer. It concluded that his concerns were subjective and not backed by evidence. Richardson assumed he would need to repurchase all his tools and guessed that the company would simply fire him again soon due to a lack of work, but he took no steps to verify these concerns. The evidence showed that the employer did not view the lack of tools as an obstacle (tool allowances were available), and there was nothing to indicate any plot to dismiss him again immediately. Because Richardson never contacted the employer to discuss or clarify these worries, the Court found that these were merely unsubstantiated assumptions on his part, not reasonable grounds to reject the job offer. There was also no indication of a toxic work environment that would have made returning truly intolerable. Therefore, from an objective standpoint, a reasonable person in his position would have accepted the re-employment offer as a means to mitigate loss.
- Mitigation and Damages: Normally, in a wrongful dismissal case, the employer bears the burden of proving that the employee failed to mitigate, which involves showing both that the employee did not make reasonable efforts to find comparable employment and that, had they done so, they likely would have found a job. In this case, apart from the re-employment offer, New West had limited evidence of other jobs Richardson could have secured at age 73. The Court noted that Richardson’s attempt of only three job applications post-termination was not a robust search, but New West had not demonstrated that other employment was actually attainable for him given his age and circumstances. However, the availability of the old job itself as a mitigation opportunity effectively answered the mitigation question. Since a suitable position at the same employer was offered and was unreasonably refused, the court held that Richardson failed to mitigate his damages regardless of the general job market prospects. In sum, the Evans principle was applied: Richardson should have mitigated his loss by returning to his former employer, and his refusal to do so was deemed unreasonable in the circumstances.
Decision and Outcome
Wrongful Dismissal Claim Dismissed: The Alberta Court of Justice ultimately dismissed Richardson’s wrongful dismissal claim in its entirety. Because he was found to have failed in his duty to mitigate by turning down a reasonable offer of re-employment, he was not awarded any additional severance or damages beyond the working notice pay he had already received. In other words, even if the original notice period might have been shorter than what common law reasonable notice would dictate for someone of his tenure and age, Richardson’s refusal to return to work meant he forfeited the right to claim those extra damages. The Court also did not award aggravated damages, given that it found no bad faith in the employer’s conduct and because the entire claim had been unsuccessful.
Key takeaway: An employer’s sincere offer to rehire a dismissed employee on similar terms can dramatically limit the employer’s liability for wrongful dismissal. In this case, Richardson’s lack of a good objective reason to reject the offer meant that the court viewed the offer as a reasonable opportunity he should have taken to mitigate his loss. Consequently, the dismissal was effectively not “wrongful” in financial terms, because any entitlement to further notice or pay in lieu was nullified by the failure to mitigate. This outcome reinforces that Alberta courts (applying Evans) expect dismissed employees to act reasonably by accepting re-employment with their former employer when there are no special circumstances make returning intolerable or impractical.
*Always seek legal advice. The above is for information purposes only.
Stephen Dugandzic received his Juris Doctor degree from the University of Alberta in 2013 and is Calgary-based. He previously practised with Bennett Jones LLP and Taylor Janis LLP before founding YYC Employment Law Group in 2018 and Evolution Legal in 2026.