When mitigation meets inference: What employers can take from Gugulyn v. Alberta

The recent Alberta Court of Appeal decision in Gugulyn v. Alberta, 2026 ABCA 68 provides a useful reminder for employers navigating mitigation arguments in wrongful or constructive dismissal cases. While the outcome of this case ultimately favoured the employee in several respects, the Court’s reasoning offers practical guidance on how employers can meet their evidentiary burden without complicating their case. 

Background 

A long-serving employee of the Government of Alberta was constructively dismissed after being reassigned to a role he believed he was unqualified to perform. He declined the new position and did not return to work. At trial, the Court found he had been constructively dismissed and, was entitled to 23 months’ pay in lieu of notice under the common law. 

However, the Court also found that the Employee had failed to fully mitigate his damages. The trial judge concluded that, had the Employee taken reasonable steps, he would have secured comparable employment within 17 months. The Employee’s damages were reduced on that basis. 

Both parties appealed on the issue of mitigation. 

Refusal to return to work: A reminder on “intolerable” workplaces 

The Government of Alberta argued that the Employee failed to mitigate by declining its offer of continued employment in the new role. The Court of Appeal rejected this argument, affirming that a reasonable employee is not required to return to a workplace that is “intolerable,” including where: 

• The employment relationship has become acrimonious 

• Litigation is underway, or 

• Trust has been undermined 

For employers, this reinforces a familiar but important point: offering continued employment will not always satisfy the duty to mitigate, particularly where the employment relationship has broken down. 

The more interesting takeaway: Proving alternative employment 

The most notable aspect of the decision – and the one most helpful to employers – is the Court’s treatment of how mitigation can be proven. 

The burden of proving a failure to mitigate is on the employer. Employers often face a practical challenge: how to demonstrate that an employee would have found comparable employment within a given timeframe. Prior case law has suggested a high evidentiary burden, including the need to prove that the employee would have actually obtained a specific role. In this case, the Court confirmed that: 

• Employers do not necessarily need expert evidence 

• Courts can draw reasonable factual inferences based on the evidence 

• Job postings, combined with evidence regarding the employee’s qualifications and experience, may be enough to establish that alternative employment was available 

The trial judge inferred that the Employee would have secured a comparable role within 17 months based on his skills and available postings. The Court of Appeal found no error in that approach. 

Why this matters for employers 

This clarification is significant. It lowers the practical barrier for employers advancing mitigation arguments and aligns the analysis more closely with real-world hiring practices. 

Employers are not required to prove a hypothetical hiring decision with certainty. Instead, they must present credible evidence from which a court can draw reasonable conclusions. That said, the burden still rests with the employer. The evidence must be concrete enough to support the inference. 

Practical guidance for HR professionals 

For HR leaders and professionals, Gugulyn highlights several actionable considerations when managing terminations and potential litigation: 

1. Document comparable opportunities early

Maintain records of internal and external job postings that align with the employee’s qualifications. These can become necessary evidence in mitigation disputes. Care should be taken to ensure that the postings are comparable alternative positions – courts frown upon reliance on postings that are a step down or otherwise demeaning or degrading to the employee. 

2. Focus on qualifications and fit

Courts will look at whether the employee had the skills and experience to obtain comparable roles. Ensure job descriptions and internal role requirements are clearly documented. 

3. Be strategic about re-employment offers

Offering continued employment can support a mitigation argument, but only if the working environment remains viable. Where relationships have deteriorated, such offers may not have much weight. Employers should also be mindful to maintain respect and collegiality with the Employee during any re-offer as this can help legitimize the legal merit of the offer. 

4. Frame mitigation arguments around reasonableness

The key question is whether the employee would likely have found comparable employment, not whether they definitely would have secured a specific job. 

Key takeaways 

From an employer’s perspective, Gugulyn offers a balanced outcome and a welcome decision for those facing wrongful dismissal litigation. The defence of a failure to mitigate may not be as impossible to prove going forward. 

The MLT Aikins Labour and Employment group is one of the largest in Western Canada and acts for employers in all sectors. We help employers to respond quickly and effectively to workforce challenges, providing proactive, practical and innovative advice and assistance on all labour and employment matters.  

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