CASE: Davies v.

Fraser Collection Services Limited, 2008 BCSC 942

ISSUE 1: Whether or not Mr. Davies temporary lay-off can be considered a wrongful dismissal

FACTS: Mr. Davies was told by Mr. McCann that the company had experienced a reduction in
business as the result of a loss of a major client, and that Mr. Davies would be placed on
temporary lay-off because of lack of work. He was recalled two months later but he refused to
return. He was there 5 years.

DECISION: The court found that Mr. Davies has established a termination of his employment
without notice, and therefore an entitlement to damages.

RATIO/REASON: Clause 16 of the agreement between Mr. Davies and Fraser Collection
provides that an alteration of the contract (the temporary lay-off) had to be in writing. Davies
points out that there was no written alteration of the contract, and in any event, there was no
consideration for any amended agreement. There is no basis upon which to hold that there is
an implied term that temporary lay-offs would be allowed.

Mr. Davies did not agree to enter into another form of employment agreement. There was no
contractual authority, express or implied, to allow a temporary lay-off.

ISSUE 2: Whether Mr. Davies failed to mitigate his damages

FACTS 2: Mr. Davies refused to return to work when he was recalled by the defendant, and/or
by unreasonably restricting his employment prospects by deciding to abide by the restraint of
competition clause in the contract.

DECISION 2: Mr. Davies failed to take appropriate actions to mitigate the damages and
therefore is entitled only to 2 months instead of 6.5 that he would have under the contract.

RATIO/REASON 2: Mr. Davies has failed to mitigate his damages by failing to offer to return to
employment with the defendant in order to work out the remainder of the notice period after the
recall. He refused to communicate with his employer who was trying to rehire him, refused to
respond to an offer of further employment. He treated the contract as unequivocally terminated,
sued the employer for having wrongfully terminated the contract, and then purport to rely on the
contractual non-competition clause to deliberately reduce his ability to mitigate his damages
simply because he did not wish to work.