If you fail to pay anything beyond the employee’s minimum legal entitlements under the employment standards act then the employee will likely consult with a lawyer, and if their demands for increased funds are not met then they will more than likely commence legal action. Negotiations can always continue even while a lawsuit is in process. Some employers will continue paying an employee through this negotiation period, knowing that the amount will be deducted from any settlement later, and other employers will drive a hard line to await some sort of judgment from a court.
With regard to mitigation, the courts have historically taken three separate approaches. One is the contingency approach, where the court will incorporate some sort of contingency amount for the employee finding new work if judgment is rendered during the reasonable notice period. Another common approach is known as the ‘trust and accounting’ approach, where the court will award a larger amount but also order a trust, so that if the employee does find work within that time then they are required to account for any money earned after they start working. A third option is a partial summary judgment, where a court may award a small amount up front and then revisit the issue once the reasonable notice period has run out.
In short, you can consider a ‘wait and see’ approach, but you’ll also be working closely with your lawyer who can advise you on the prospects of success in court and the advantages of a negotiated settlement, as well as how to be strategic in your approach.
