Employees dismissed without notice are expected to make reasonable efforts to reduce their losses. Employers sometimes interpret that duty as requiring a person to apply for any available job, no matter how different it is from the former position. The law is more nuanced, and a recent Ontario appeal illustrates the separate treatment of job search and actual earnings.
In Williamson v. Brandt Tractor Inc., 2026 ONCA 272, an employer appealed a wrongful dismissal award to a longstanding worker. The company said it had cause based on a culminating customer incident. It also argued that Williamson failed to mitigate because he didn't apply for comparable sales positions. He had, however, found employment at a lower level of compensation.
The Court of Appeal agreed with the trial judge that just cause wasn't proven. The alleged customer incident lacked admissible evidence from the customer, and the employer hadn't shown the required culminating event. The mitigation defence failed because the employer hadn't proven that comparable sales positions were actually available and likely to be secured had Williamson applied for them.
But the trial judge made a separate error. Because Williamson had earned $32,881.43 in a lower paying position during the 17 month notice period, that income generally had to be deducted from the damages. The Court of Appeal reduced the award by that amount while rejecting the employer's other grounds of appeal.
The decision distinguishes two questions often confused in negotiations. An employee may not be obliged to accept a substantially inferior position when searching for replacement work. Yet if the employee does take the position and actually earns income, the earnings will ordinarily reduce the financial loss attributable to dismissal.
For employers, speculation that a former worker could have found a better job isn't enough to prove failure to mitigate. Comparable opportunities need supporting evidence. For employees, documentation of search efforts and actual replacement earnings matters, even where the new job is less desirable.
Source: Ontario Court of Appeal, Williamson v. Brandt Tractor Inc., 2026 ONCA 272, https://www.minicounsel.ca/oca/2026/272