Can an employer dismiss an employee, then change its mind, unilaterally retract the dismissal, and require that the employee continue to work? The answer to this question is currently unfolding before the world in real time.
A week ago, Elon Musk took over Twitter and immediately began to dismiss employees. It appears that the criteria used to make these dismissals was not in line with Twitter’s operating requirements, and some of the ‘wrong’ people were dismissed. Yesterday, news circulated that Twitter was contacting a number of these dismissed employees in an attempt to retract the notice of dismissal and have them return to work. It remains unclear if any of these individuals were working in Canada.
Do these employees (if they were previously employed in Canada) have any obligation to accept the retraction of their dismissal and return to work? Or can they take the position that their employment with Twitter has been terminated? The answer to these questions may surprise you.
The Law on Retraction of Dismissal in Canada
This area of law is not frequently litigated – but it has been addressed – and the Canadian courts have established a clear rule to address this situation.
Roche v Sameday Worldwide
In Roche v Sameday Worldwide [Roche], the employee was on long term disability. The employer, believing the employee had advised that they were incapable of returning to work at all, sent the employee a letter terminating their employment. The employer soon learned this was an error and sent the employee a letter revoking the dismissal. At the same time, the employee also sent the employer a letter asking the employer to revoke the termination.
The employee continued to act as an employee, requesting and accepting health benefits. Despite this, the employee later claimed that she had been wrongfully dismissed and sued.
The Court ruled that the employer’s revocation was sufficient and took place before the dismissal had taken effect, and that the employee remained an employee of the employer.
Nason v Thunder Bay Orthopaedics Inc.
In Nason v Thunder Bay Orthopaedic Inc. [Nason] the employer issued a notice of dismissal to an employee in January 2013, to be effective in April 2013. In February 2013 the employer attempted to revoke the notice of dismissal, which the employee did not acknowledge or accept. The employee sued for wrongful dismissal.
The Court distinguished the matter from Roche, noting that the employee had not expressly or implicitly consented to the employer’s attempt to withdraw the termination by continuing to act as an employee, and found the dismissal effective in January 2013. The rule, as outlined by the Court in Nason, is that an employer may retract an unconditional notice of dismissal – but this retraction does not apply if the employee does not acknowledge or accept it.
Where the employee does not accept the retraction, the dismissal remains in place, and they are entitled to notice or pay in lieu thereof in line with the common law.
Employee’s Duty to Mitigate
If the employee is entitled to reasonable notice of dismissal pursuant to common law, then they have a duty to mitigate, which requires the dismissed employee to make a reasonable effort to find suitable employment. The Supreme Court of Canada has confirmed that an employer may offer re-employment to a dismissed employee, which the employee must accept as a way to mitigate their losses, unless returning to work would be humiliating or otherwise problematic, such as if there was a toxic work environment.
This means that even if the employer’s attempt to retract its notice of dismissal is unsuccessful, it has a fallback position of offering the employee their job back, at least for the duration of the reasonable notice period. This does not apply where the employee’s dismissal was acrimonious – an employee is not expected to return to a job that made a spectacle of their dismissal and then frogmarched out the door.
An unconditional notice of dismissal is a unilateral act by an employer, advising the employee that their time with them has, or will, come to an end. The employee has no say in the matter. An attempt to retract a dismissal is also a unilateral act by the employer – but for this to become effective, the employee must accept the retraction and return to work. The employee is under no compulsion to do so and may continue to treat their employment with the employer as terminated. However, the employer may still offer the employee their job back, which the employee must accept in most cases.
It’s always better to make an informed decision, either before you proceed with a dismissal, before you try to retract it, or if you receive a notice of dismissal. We assist both employers and employees in all aspects of the employment relationship, and would be happy to assist you whether you are an employee whose employment has been terminated, or an employer who has dismissed an employee and is now having second thoughts.