Mitigation of Damages — Ontario Employment Law
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About Mitigation of Damages
Many employees in Ontario believe that if they are wrongfully dismissed, they are automatically entitled to a large payout covering a lengthy period of unemployment. However, the law imposes a crucial responsibility on the dismissed employee known as the 'duty to mitigate damages.' In simple terms, this means you cannot sit back and wait for a cheque; you have a legal obligation to take reasonable steps to find a new, comparable job to reduce your financial losses. This principle is rooted in common law and significantly impacts the amount of damages you can recover in a wrongful dismissal claim.
The core of mitigation is the job search. You are expected to actively and diligently look for work that is similar in status, responsibility, and pay to the position you lost. This doesn't mean you have to accept the very first offer, especially if it's a significant step down. However, you cannot be overly picky, such as only applying for senior executive roles if you were a mid-level manager. The burden of proof is on the employer to show that you failed to mitigate. They must demonstrate that comparable jobs were available and that you did not take reasonable steps to secure one.
It's critical to distinguish between common law reasonable notice damages and statutory entitlements under Ontario's Employment Standards Act, 2000 (ESA). The duty to mitigate applies only to common law damages. Your entitlement to minimum termination pay and severance pay under the ESA is a fixed amount based on your service and is not reduced by any income you earn from a new job. Understanding this distinction is vital. Because the reasonableness of a job search is highly dependent on individual facts like your age, seniority, and the job market, navigating a mitigation dispute often requires tailored legal insight.
Frequently Asked Questions
What exactly does 'mitigation of damages' mean after being fired in Ontario?
It's your legal duty as a wrongfully dismissed employee to make reasonable efforts to find a new, comparable job. The goal is to minimize your financial losses, and any income you earn from a new job during your notice period will typically reduce the damages your former employer owes you.
Do I have to accept any job I'm offered to mitigate my damages?
No. You are only required to seek and accept 'comparable employment,' which means a job similar in salary, status, and responsibilities. You are not obligated to take a significant demotion or a job in a completely different field just to mitigate.
What proof do I need to show I tried to find a new job?
You should keep a detailed record of your job search. This includes a log of all jobs you applied for, copies of cover letters and resumes sent, emails with recruiters, and notes from interviews or networking events. This documentation is crucial evidence to counter an employer's claim that you failed to mitigate.
Does my duty to mitigate affect my statutory severance or termination pay under the ESA?
No, it does not. The duty to mitigate only applies to common law reasonable notice damages. Your minimum entitlements to termination pay and severance pay under the Employment Standards Act, 2000 are separate and are not reduced by income from a new job.
What if I was constructively dismissed? Do I have to accept the 'new' bad job to mitigate?
In some situations, yes. If the changes to your job are not objectively humiliating or unreasonable, a court might expect you to stay in the modified role to mitigate your losses while you search for other work. This is a very complex area and depends heavily on the specific facts.
How long do I have to keep looking for a job?
Your duty to mitigate damages lasts for the duration of your common law reasonable notice period. Once that period expires, your legal obligation to mitigate in relation to that specific wrongful dismissal claim also ends.
My former employer is accusing me of not trying hard enough to find a job. When should I get legal advice?
You should seek legal advice immediately. An employer's allegation that you failed to mitigate is a direct challenge to your damages claim. A lawyer can help you assess the strength of your job search evidence and formulate a legal response to protect your entitlement.
Common Scenarios
- A senior marketing director is wrongfully dismissed and keeps a detailed spreadsheet of over 100 job applications, networking coffees, and interviews, which is later used as evidence to prove she properly mitigated her damages.
- After being terminated, a software developer takes a four-month vacation before starting his job search. His former employer argues they are not responsible for damages during that four-month period due to his failure to mitigate.
- A long-service administrative assistant is terminated and refuses to apply for any jobs paying less than her previous role, even though similar roles in her city now pay 10% less on average.
- An employee is constructively dismissed when her sales territory is cut in half. She quits immediately, but the court later finds she should have stayed in the role to mitigate her damages while looking for a new job, reducing her overall award.
What You Should Know
- Start your job search immediately after termination and document everything. Create a log to track applications, interviews, and networking efforts.
- Focus your search on roles that are comparable to your previous one in terms of pay, seniority, and type of work to satisfy your duty to mitigate.
- Be aware that any income earned from new employment during your common law notice period will likely be deducted from the damages your former employer owes you.
- Remember that your statutory entitlements under the Employment Standards Act, 2000 (ESA) are separate and are not reduced by mitigation income.
- If your former employer raises the issue of mitigation, consult with an employment lawyer to review your job search efforts and ensure your claim for damages is protected.
Featured Cases
Ghazvini et al v. Canadian Imperial Bank Of Commerce
2025 ONSC 5218 (CanLII) · 2025-09-25Termination Provisions Unenforceable: Reasonable Notice and Damages Awarded
A case involving termination provisions under the Canada Labour Code, where the court found termination clauses unenforceable due to ambiguity and overreach. The court also awarded reasonable notice and damages for lost compensation, and rejected the employer's claim that the employees failed to mitigate their damages.
Kondaj v. Crossbridge Condominium Services Ltd.
2025 ONSC 3905 (CanLII) · 2025-06-30Termination of Employment: Common Law Notice and Statutory Interpretation
A case involving the termination of employment where the court determined that the incoming service provider was liable for common law notice to the plaintiff. The court also addressed the interpretation of successor employer provisions and the application of reasonable notice principles, including mitigation of damages and the enforceability of termination clauses.
McFarlane v. King Ursa Inc.
2025 ONSC 3553 (CanLII) · 2025-06-18Constructive Dismissal: Maternity Leave, Demotion, and Salary Reduction
A constructive dismissal case involving an employee who was demoted and had her salary reduced upon returning from maternity leave. The court ruled that the demotion and significant pay cut independently amounted to constructive dismissal and awarded moral damages for the employer's insensitive conduct. The case also addressed the employee's duty to mitigate damages and the appropriate notice period for a senior executive position.
Abbasbayli v. Fiera Foods Company
2025 ONSC 3240 (CanLII) · 2025-05-30Termination for Cause: Time Theft and Mitigation of Damages
A termination for cause case where an employee was accused of time theft and denied wrongdoing. The court determined the employer had just cause to terminate the employee and awarded ten months' notice period. The employee failed to mitigate damages by not producing tax returns or evidence of job search efforts, and a claim for unpaid vacation pay under the Ontario Business Corporations Act was dismissed as abandoned.
Paul v. Sensient Colors
2025 ONSC 3127 (CanLII) · 2025-05-26Wrongful Dismissal: Employee Terminated for Non-Compliance with Vaccination Policy
A wrongful dismissal case where an employee was terminated for non-compliance with the employer's COVID-19 vaccination policy. The court found no just cause for termination and awarded 12 months' notice and $182,822.84 in damages, applying Bardal factors.
Salam v. Ontario Research and Innovation Network
2025 ONSC 1839 (CanLII) · 2025-04-01Wrongful Dismissal: Plaintiff Awarded Six Months' Notice and Commissions
A wrongful dismissal case where the plaintiff was terminated without cause after two years and three months of service. The court awarded six months' notice, loss of benefits, and commissions during the notice period, totaling $58,419.52 less statutory deductions, based on the Bardal factors and the original employment agreement.
Poesl v. Sharon Veterinary Clinic Professional Corporation
2025 ONSC 622 (CanLII) · 2025-01-29Constructive Dismissal: 20-Year Vet Resigned After Employer Refused to Send Termination Letter
A 20-year veteran veterinarian claimed constructive dismissal after the employer refused to send a termination letter to a client. The court found no constructive dismissal, ruling that the employee's refusal to return to work amounted to resignation. The court also dismissed wrongful dismissal claims and found the employee failed to mitigate damages.
Bazilinsky v. MacDougall
2024 ONSC 7015 (CanLII) · 2024-12-13Investment Advisor Termination: Reasonable Notice and Mitigation
A termination for cause case involving an investment advisor who was dismissed for engaging in unauthorized discretionary trading. The court also considered the appropriate reasonable notice period, mitigation of damages, and claims of oppression related to the sale of shares upon termination.
Manthadi v ASCO Manufacturing
2023 ONSC 3499 (CanLII) · 2023-06-09Wrongful Dismissal: Successor Employer Determination and 12 Months' Notice Awarded
A wrongful dismissal case where the court determined that the defendant was a successor employer and awarded 12 months' notice to the plaintiff. The court also granted $39,834.44 in damages, applying Bardal factors and common law principles of reasonable notice.
Tan v Stostac Inc.
2023 ONSC 2121 (CanLII) · 2023-04-04Wrongful Dismissal: Managerial Position, Seven Months Notice, CERB Payments
A wrongful dismissal case where a managerial position was terminated after nearly five years of service due to economic conditions. The court awarded seven months of notice and ruled that CERB payments should not be deducted from damages. The termination clause in the employment agreement was found unenforceable for non-compliance with the Employment Standards Act, 2000.
Milwid v. IBM Canada Ltd.
2023 ONSC 490 (CanLII) · 2023-01-2638-Year Employee Wrongful Dismissal: 27 Months Notice and Damages
A wrongful dismissal case involving a 38-year employee terminated without cause. The court extended the notice period to 27 months, applied Bardal factors, and addressed compensation for unvested RSUs and discretionary bonuses. Mitigation efforts and pension contributions were also considered.
Williams v. Air Canada
2022 ONSC 6616 (CanLII) · 2022-11-25Air Canada Termination: 24 Months' Notice and Lost Benefits Awarded
A long-term employee of Air Canada was terminated without cause during the COVID-19 pandemic. The court awarded 24 months' notice, considering age, tenure, and economic uncertainty. The case also addressed damages for lost benefits and the nature of employment privileges, ultimately dismissing claims for travel and service awards. Mitigation efforts were deemed reasonable, and the court did not apply a trust and accounting approach to the judgment.
Summers v. Oz Optics Limited
2022 ONSC 6225 (CanLII) · 2022-11-03Termination of Employment: Common Law Notice and Mitigation
A case involving the termination of employment after 3.5 years of service for a 61-year-old employee in a specialized technical position. The court determined the appropriate common law notice period, found the employee's mitigation efforts reasonable, and ruled that a non-compliant termination clause is void, entitling the employee to full common law notice.
Quesnelle v. Camus Hydronics Ltd.
2022 ONSC 6156 (CanLII) · 2022-10-31Constructive Dismissal: Reasonable Notice and Mitigation of Damages
A constructive dismissal case involving a skilled employee with seven years of service who was 55 years old. The court determined the appropriate reasonable notice period using Bardal factors and assessed whether the plaintiff failed to mitigate damages by relocating to a less active job market. The case also addressed the common employer doctrine and the enforceability of termination clauses.
Miranda v. Respiratory Services Limited
2022 ONSC 6094 (CanLII) · 2022-10-27Constructive Dismissal: Long-Term Employee Awarded 22 Months' Notice
A constructive dismissal case involving a long-term employee who was laid off indefinitely due to a lack of work following the death of a key doctor. The court found the employer's actions constituted constructive dismissal and awarded 22 months' notice based on Bardal factors, rejecting the employer's claim that the plaintiff failed to mitigate damages.
Nassar v. Oracle Global Services
2022 ONSC 5401 (CanLII) · 2022-09-22Wrongful Dismissal: Plaintiff Awarded $48,630 in Damages
A wrongful dismissal case where the plaintiff was terminated without cause under an unenforceable termination clause. The court determined a five-month notice period based on Bardal factors and granted summary judgment for damages, awarding $48,630 in base salary, $10,600 in commissions, and $5,000 in benefits.
Henderson v. Slavkin et al.
2022 ONSC 2964 (CanLII) · 2022-08-10Wrongful Dismissal: Termination Clauses Invalidated, Damages Awarded
A wrongful dismissal case where the court invalidated ambiguous termination clauses in an employment contract, finding them non-compliant with the Employment Standards Act (ESA). The plaintiff was awarded common-law damages, and the court considered mitigation of damages in the context of the pandemic. CERB payments were not deducted from the damages award.
Scamurra v Scamurra Contracting
2022 ONSC 4222 (CanLII) · 2022-07-18Wrongful Dismissal: Employee Terminated After Raising Mismanagement Claims
A wrongful dismissal case where the plaintiff, who worked for seven years as an employee of AFJ Disposal Inc., was terminated after raising allegations of mismanagement. The court found the termination retaliatory and awarded 22 months' notice and $119,860 in damages, rejecting the defendant's claim of failure to mitigate.
Lopez-Gonzalez v. Reliance Legal Services Ltd.
2022 ONSC 2255 (CanLII) · 2022-04-13Wrongful Dismissal: 12 Months' Notice Awarded Despite Compliance
A wrongful dismissal case involving a plaintiff who was employed for nine years and one month and terminated during the pandemic. The court awarded 12 months' notice and found that the defendant failed to prove the plaintiff did not mitigate damages. Common law principles were applied despite compliance with the Employment Standards Act.
Amerato v. TST-CF Solutions LP
2022 ONSC 5339 (CanLII) · 2022-01-26Wrongful Dismissal: 18 Months' Notice Awarded for Demotion and Disability
Amerato v. TST-CF Solutions LP is a wrongful dismissal case where the plaintiff was terminated without cause and offered a demotion. The court determined the termination was unequivocal, awarding 18 months' notice. Disability benefits were not deducted from damages, and the plaintiff's mitigation efforts were considered. No aggravated damages were awarded due to lack of evidence of bad faith or discrimination.