Ontario Court of Appeal Overturns Mitigation Decision

On October 31, 2022, the Ontario Court of Appeal issued a decision, overturning a mitigation decision in a wrongful dismissal case.

The Superior Court judge had found that the Appellant was wrongfully dismissed from her employment and entitled to eight months’ reasonable notice of termination. However, the judge also concluded that the Appellant had failed to act reasonably in her duty to mitigate her losses and therefore reduced her notice period to six months.

On appeal, the Court of Appeal found that the judge’s decision was based on two errors. First, the judge incorrectly held that the Appellant had taken insufficient mitigation steps because she had not applied for lower-paying positions than the one she was terminated from. The Court of Appeal confirmed that the duty to mitigate only requires an employee to look for employment “that is comparable in status, hours and remuneration to the position held at the time of dismissal.” The Court also found that the judge had placed too much weight on the titles of the positions that the Appellant had applied for, without looking at whether the duties were, in fact, comparable to the Appellant’s former position.

Second, the Court of Appeal found that there was no evidence to support the judge’s assumption that the Appellant would have increased her chances of finding new employment if she had made more efforts. The judge could not rely on such an assumption without some evidence to support it. In addition, the Court highlighted that simply assuming that more efforts would increase an employee’s chances of finding new employment did not complete the mitigation test. The legal test required assessing whether the employer had proven that “if reasonable steps in mitigation had been taken by the appellant, [the appellant] would have found a comparable position during the reasonable notice period.” The judge had therefore not performed the right analysis.

As a result, the Court of Appeal overturned the Superior Court’s decision and directed that the Appellant be paid the full eight month notice period, without a reduction due to mitigation.

The Appellant was represented by Morgan Rowe of RavenLaw and Dorian Persaud of Persaud Employment Law.