Mitigating Damages After Dismissal

Ontario Court of Appeal distinguishes between statutory notice period and common law notice period with respect to mitigation

Employees are required to make best efforts to reduce their damages after dismissal, usually by attempting to secure comparable employment elsewhere. These mitigation efforts are taken into consideration by courts when awarding damages to dismissed employees for wrongful or constructive dismissal. If an employee earns new income after his/her dismissal, this income is usually deducted from any damages award against the former employer. If an employee does not take reasonable steps to mitigate their damages, a court may reduce the amount of damages that would have otherwise been owed to the employee. In Brake v. PJ-M2R Restaurant Inc.,¹ the Ontario Court of Appeal held that earnings during the statutory notice and severance period are not deductible as mitigation income from the damages award payable by an employer. The Court held that