Background
In Gugulyn v Government of Alberta, the Alberta Court of Appeal considered two mitigation questions arising from a constructive dismissal: whether the dismissed employee was required to accept his employer’s offer of re-employment, and whether he took sufficient steps to find alternative work during the notice period. The decision confirms the analytical framework for both questions and offers useful guidance on the evidentiary standards that apply.
The plaintiff had worked for the Government of Alberta for over 23 years, most recently as Director of Financial Planning. In early 2021, following a wave of departures in his department, his supervisor announced that he had accepted a transfer to the position of Director of Compliance. The employee had not agreed to the move and objected on the basis that the role required qualifications and experience he did not possess. He retained legal counsel, who put Alberta on notice of a constructive dismissal claim on March 16, 2021. Alberta responded by issuing a formal offer of the Compliance Director position on March 24, 2021. The plaintiff declined and did not return to work.
The trial judge found that Alberta had constructively dismissed the plaintiff, a finding that was not under appeal. The plaintiff was awarded the equivalent of 23 months’ pay and benefits as notice. However, the trial judge reduced that award on the basis that the plaintiff had failed to take reasonable steps to find comparable alternative employment, and that had he done so, he would have secured a suitable position within 17 months. Both parties appealed.
For background on the legal test for constructive dismissal before the mitigation issues in this case, see our main guide.
Issue One: The Obligation to Accept Re-Employment
Alberta argued that the plaintiff’s refusal of the March 24 offer constituted a complete failure to mitigate, on the theory that acceptance would have eliminated his loss entirely.
The Court of Appeal dismissed this ground of appeal, applying the multi-factor framework from Evans v Teamsters Local Union No 31, 2008 SCC 20. Under Evans, the central question is whether a reasonable person in the employee’s position would have accepted the offer, with particular attention to whether returning would require the employee to work in a hostile, embarrassing, or humiliating environment.
The trial judge identified three findings that supported a conclusion of intolerability. First, the plaintiff had already commenced a legal claim against Alberta before the formal offer was made. Second, the relationship between the plaintiff and the supervisor to whom he would have reported had become acrimonious. Third, Alberta’s conduct in unilaterally announcing the transfer had undermined the foundational trust of the employment relationship. The Court of Appeal found no error in the trial judge’s analysis.
Alberta argued that the trial judge had applied a subjective rather than objective standard. The Court rejected this characterization. The trial judge’s references to the plaintiff’s personal experience reflected credibility findings, not a departure from the objective Evans standard. Applying credibility findings to an objective legal test is a proper exercise of the trial judge’s function and does not constitute a reviewable error.
Issue Two: The Obligation to Search for Alternative Employment
The trial judge found that the plaintiff had not taken reasonable steps to search for comparable positions within the broader Government of Alberta, and that a diligent search would have yielded a suitable result within 17 months of the constructive dismissal. The award was reduced accordingly.
On appeal, the plaintiff argued that he had in fact met his mitigation obligations, or in the alternative, that the evidence did not support the inference that comparable employment would have been found within the 23-month notice period. Alberta argued that the appropriate period was nine months, not 17.
The Court of Appeal upheld the trial judge’s findings on this issue as well. The standard of review for findings of mixed fact and law requires a palpable and overriding error, and neither party met that threshold. The Court also addressed the evidentiary question of whether expert recruitment evidence was necessary to support a finding on the availability of alternative employment. It confirmed that no such evidence was required. A trial judge is entitled to draw factual inferences from the plaintiff’s qualifications and skills, together with the job postings that were introduced in evidence, to conclude that comparable work was available and obtainable within the relevant period.
Both the appeal and the cross-appeal were dismissed.
Analysis
Gugulyn reinforces several established principles in the law of constructive dismissal and mitigation, while offering practical guidance on their application.
On the re-employment question, the decision confirms that an employer’s formal offer to reinstate a dismissed employee does not automatically discharge its liability or trigger a failure to mitigate. The Evans analysis requires a contextual, fact-specific assessment. Where litigation has commenced, where supervisory relationships have deteriorated, and where the employer’s conduct has eroded trust, it will be difficult to establish that a reasonable employee would have returned.
The timing of events is significant. The three-week period between the supervisor’s announcement on March 2 and the formal offer on March 24 was central to the outcome. The steps the plaintiff took in that window — objecting to the transfer, retaining counsel, and issuing formal notice of the constructive dismissal claim — were the primary basis for the court’s finding that the employment relationship had broken down irreparably. The decision illustrates how quickly the factual record that governs a damages analysis can be established, and how consequential early actions can be.
On the job search question, the decision makes clear that mitigation is a genuine obligation that courts take seriously. The burden of proving a failure to mitigate rests with the employer, but where an employee makes no meaningful effort to seek comparable employment, that burden can be discharged without expert evidence. Courts retain the ability to draw reasonable inferences from the employee’s background and the state of the relevant job market as disclosed by available postings.
Recommendations
For Lawyers and HR Professionals
The Evans framework remains the governing standard for re-employment offers, and Gugulyn confirms that its application is highly fact-dependent. Practitioners advising employers should assess carefully whether the relational conditions for a reasonable return offer actually exist before treating a re-employment offer as a mitigation defence. The offer must be made into circumstances where acceptance is objectively reasonable, and active litigation and an acrimonious supervisory relationship may foreclose that argument.
Practitioners advising employees should document the deterioration of the employment relationship contemporaneously. The plaintiff’s early steps, retaining counsel, issuing formal notice, and objecting on the record, were not incidental to the outcome. They were central to it. Advising clients to act promptly and to preserve a clear evidentiary record is essential.
On the mitigation search question, practitioners should note that the absence of expert recruitment evidence was not fatal to the employer’s position. Courts may find evidence of available roles sufficient to draw inferences. Employees who make no documented effort to search for comparable work do so at real cost to their damages award.
For Employers
Where a constructive dismissal claim has been raised and legal proceedings are underway or imminent, a re-employment offer is unlikely to succeed as a complete mitigation defence unless the relational conditions support a finding that acceptance was objectively reasonable. Employers should assess the state of the supervisory relationship and the degree to which their own conduct contributed to the breakdown before relying on a re-employment offer to extinguish liability.
More broadly, employers should be attentive to the early stages of a constructive dismissal dispute. The period immediately following the triggering event is often where the factual record that will determine the damages analysis is established.
Employers should also be aware that the burden of proving mitigation failure, while resting with them, does not require expert evidence in every case. However, the evidentiary record does matter. Documenting the availability of comparable roles and the state of the relevant employment market will strengthen the argument that a diligent search would have yielded results within a shorter period.
For Employees
A constructive dismissal does not require an employee to accept any and all offers of re-employment. Where the working relationship has broken down to the point that returning would be objectively hostile, embarrassing, or humiliating, a refusal to return will not be treated as a failure to mitigate. The assessment turns on the specific facts, including the state of the supervisory relationship, whether litigation has commenced, and the employer’s own conduct.
At the same time, the obligation to mitigate through a genuine job search is real and enforceable. Courts expect dismissed employees to take reasonable steps to find comparable employment, and a failure to do so will result in a reduction of the damages award. The reduction need not correspond to the full notice period, but it will reflect the period within which comparable employment would likely have been found.
Timing is significant. The steps taken in the period immediately following a constructive dismissal, including retaining counsel, formally asserting the claim, and beginning a documented job search, have direct bearing on both the liability and the quantum analysis. Early and well-documented action protects the employee’s legal position in both respects.
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