The Court of Appeal Considers the Duty to Mitigate

A dismissed employee has a legal obligation to take reasonable steps to minimize the financial loss suffered as a result of their termination of employment. The legal term for this obligation is “the duty to mitigate”. It requires the dismissed employee to take reasonable steps to find comparable employment elsewhere.

The employer bears the evidentiary burden of proving that the employee failed to take reasonable steps to mitigate their damages.

In a wrongful dismissal action the dispute between the dismissed employee and employer often revolves around the whether the employee’s job search was reasonable and whether the employee failed to apply to comparable job positions.

A recent decision by the Ontario Court of Appeal in Maasland v. Toronto (City), 2016 ONCA 551 provides additional guidance as to what a reasonable search for “comparable” employment looks like in practice. In Massland the employer argued that the employee failed to take reasonable steps to mitigate her damages because she:

  • did not apply for any positions outside of Toronto. In particular, the employer pointed to the fact that the employee did not apply for a position for which she was qualified in York Region because it was 50km from her home; and
  • took time off her job search to attend the criminal trial of the individual accused of murdering her brother.

The Court of Appeal firmly rejected both submissions.

Dealing with the argument that the employee had not acted reasonably when she failed to seek employment outside of Toronto the Court wrote, “the motion judge’s conclusion on this issue comes even close to being a palpable and overriding error”.

The Court of Appeal similarly dismissed the employer’s suggestion that the dismissed employee’s family tragedy had contributed towards her failure to obtain new employment writing:

…there is absolutely nothing wrong with the (employee), dismissed from a 25-year position at age 58, including planned attendance at the trial relating to the murder of her brother as a contextual factor in her search for a new position.”

Maasland is another example of the extremely high bar placed in front of an employer who attempts to argue that a dismissed employee has failed to mitigate his or her damages.