The Duty to Mitigate
Gillis v. Sobeys Group Inc., 2011 NSSC 443 (CanLII)
When Deborah Gillis (the Plaintiff) was just 17 years old, she began to work for Sobeys. Over the course of the next twenty years, she steadily worked her way up to management positions. By 1998, Ms. Gillis was the store manager of the Sobeys in Truro, Nova Scotia. By April of 2003, she was again moved up the ranks to the position of a “Food Experience Manager” in the Marketing Department at the Sobeys Head Office in Stellarton, Nova Scotia.
However, in 2009, the Marketing Manager, a Ms. Stevens, was in the unenviable position of having to make structural changes to her team to improve efficiencies. As a result, by March of 2009, Deborah Gillis’ position was eliminated. Ms. Stevens, the Plaintiff’s manager, brought her in for a meeting to discuss the outcome of the restructuring and presented her with two options:
Deborah could join a Sobeys store in Truro as an Assistant Manager and her new pay, although lower, would be offset by a one-time lump sum payment from Sobeys for that year.
Ms. Gillis could become a Demo Coordinator and remain at the head office in Stellarton. Again, it would result in a lower salary, but Ms. Gillis would be entitled to a one-time lump sum payment to offset the lower salary.
Ms. Gillis, during this meeting, was also provided with some upsetting news. Ms. Gilles was told that her performance fell short of the standard that was expected of her. Deborah was shocked, as she had never been informed that there were any concerns about her performance. Ms. Gillis took some time to review her options. Deborah viewed both choices as demotions in both status and salary. As neither option presented were satisfactory to Ms. Gillis, she refused both. Sobeys dismissed her as having abandoned the position. Deborah Gillis started litigation for wrongful dismissal against Sobeys shortly thereafter.
The court considered whether Ms. Gilles was constructively dismissed and if she had discharged her duty to mitigate her damages. To establish whether the Plaintiff was constructively dismissed, the court looked to the decision of Farber v. Royal Trust Co., 1 S.C.R. 846, CanLII 387 (SCC):
Where an employer decides unilaterally to make substantial changes to the essential terms of an employee’s contract of employment and the employee does not agree to the changes and leaves his or her job, the employee has not resigned, but has been dismissed. Since the employer has not formally dismissed the employee, this is referred to as “constructive dismissal.” By unilaterally seeking to make substantial changes to the essential terms of the employment contract, the employer is ceasing to meet its obligations and is therefore terminating the contract. The employee can then treat the contract as resiliated for breach and can leave. In such circumstances, the employee is entitled to compensation in lieu of notice and, where appropriate, damages.
Ms. Gillis’ assertion that she was constructively dismissed was rejected by the court. Sobeys had responded in writing to Deborah Gillis’ request for more time to consider her options. In this letter, Sobeys stated that “We consider you a valuable employee and hope that you will decide to accept one of the positions offered.” Further, Sobeys had agreed to off-set Ms. Gillis’ wages to compensate her for the reduction in pay. The Honourable Coady, J. found that:
I find that Sobeys had no intention to terminate Ms. Gillis. In fact, it was anxious to maintain the employment relationship. I conclude that the in-store position amounted to a transfer and did not represent a substantial change in the essential terms of her employment contract.
The court later stated:
I find that the changes between the food experience manager position, and that of assistant store manager, did not fundamentally alter the terms of her long-standing employment. I find as a fact that Ms. Gillis was not constructively dismissed.
Duty to Mitigate
Demo Coordinator Position
Employees always have the duty to mitigate their damages, in other words, reduce their losses. The Judge reviewed only the position of Assistant Manager for the purpose of his consideration, as the Demo Coordinator role was considered a demotion, as noted by Ms. Gillis’ supervisor (at par. 24):
Ms. Stevens acknowledged that this position would be a demotion for Ms. Gillis and she did not expect her to accept it. She stated that this position was offered only to give Ms. Gillis an option based on hours.
And at par.25:
The import of Sobeys’ admission is that only option one, the assistant store manager position, should be viewed as a viable option in the constructive dismissal analysis.
Assistant Manager Position
Ms. Gillis’ stated that she felt the Assistant Manager position would be “a step back.” The court did not agree with her, stating:
I find that Ms. Gillis was wrong to assume accepting the in-store position would be personally embarrassing for her or would have been viewed as such by fellow employees. Ms. Gillis acknowledged that it was not unusual for Sobeys’ employees to move from head office into store positions. Ms. Gillis never suggested that accepting this position would result in her experiencing any hostility. I accept Ms. Steven’s evidence that the assistant store manager would be a desired position in the organization. I also accept that Ms. Gillis would have become a manager in “no time.” The only reason advanced by Ms. Gillis as to why the position was unacceptable to her was that she had been a store manager prior to 2003. I also find that Sobeys recognizes the value of in-store managers. Management of a store would result in more employees, more responsibilities and a competitive income. If Ms. Gillis had been able to put aside her emotional responses, she should have realized this would not be “a step back.”
The court dismissed Ms. Gillis’ action against Sobeys. With regard to the performance problems brought to Ms. Gillis’ attention during the meeting with her in March of 2009, the court stated that: “Sobeys used poor judgment in raising these issues at such a critical time.”
This case serves as an important reminder of the duty to mitigate as an employee. As noted by the court, had Ms. Gillis taken an objective look at the situation, rather than an emotional one, she may have seen that there were continued opportunities for her within the organization.