Supervisor announces director’s acceptance of job — but employee had refused change in position
An email at the Alberta government ending up in a constructive dismissal case – with the employer recently being found in the wrong.
In early 2021, following a spate of departures, long-time employee Derrick Gugulyn was told by his supervisor he would be transferred to become Director of Compliance, a role he said required education and experience he did not have. He refused.
Gugulyn had worked for the Alberta government for more than 23 years, most recently as Director of Financial Planning.
On March 2, 2021, the supervisor emailed department employees announcing that Gugulyn had accepted the new position. He had not, and he said so again.
He then retained legal counsel, who notified the Alberta government on March 16, 2021 that its conduct constituted constructive dismissal and that Gugulyn did not intend to continue his employment.
The government asked him to reconsider. On March 24, 2021, it made a formal offer of the Director of Compliance position. Again, Gugulyn did not accept it and did not return to work.
When going back is not an option
At trial, Justice D.J. Kiss found Gugulyn was entitled to 23 months' notice and the corresponding salary and benefits. The government argued at appeal that Gugulyn had completely failed to mitigate his loss by rejecting the March 24 re-employment offer.
The trial judge found that returning would have been "intolerable," based on three findings:
- Gugulyn had already informed Alberta that he intended to seek damages for constructive dismissal
- his would-be supervisor was the same person whose relationship with him was strained to the point of being "acrimonious”
- Alberta's handling of the transfer had undermined trust between employer and employee.
On March 10, 2026, the Alberta Court of Appeal confirmed this ruling, applying the leading authority on the issue, that it is not reasonable to expect an employee to return to an atmosphere that is "hostile, embarrassing or humiliating," and found the intolerable environment conclusion "simply reflects the trial judge's credibility findings, not an error of law."
Issues around mitigation
Both parties challenged the trial judge's finding on mitigation. The Alberta government argued Gugulyn would have secured alternative employment within nine months. He argued he had mitigated adequately and that his damages should not have been reduced at all.
The court rejected both positions. The burden rested on the government, as employer, to prove a failure to mitigate. The trial judge found that had Gugulyn taken reasonable steps, he would have secured a comparable position with a different branch of the government of Alberta within 17 months, reducing his damages award accordingly.
The court found it "open to the trial judge to draw the factual inference that he would have been successful within 17 months given his qualifications and skills and the job descriptions in the postings that were put in evidence."
