Must An Employee Mitigate Damages When A Fixed Term Employment Contract Is Terminated Early?

Originally published at irvinschein.com.

The recent decision of the Ontario Court of Appeal in Howard v. Benson Group Inc. clarifies the current state of the law on the duty to mitigate where a fixed term employment contract is terminated early.

In this case, Mr. Howard was employed at the Defendant's auto service center as a manager. He had a written employment contract for a five-year term starting in September, 2012.  His employer terminated the contract after almost two years, without cause.

The contract included the following provision concerning the employer's right to early termination without cause:

"Employment may be terminated at any time by the Employer and any amounts paid to the Employee shall be in accordance with the Employment Standards Act of Ontario."