The duty to mitigate requires an employee who has been wrongfully dismissed to make reasonable efforts to mitigate their damages (i.e.: lost employment income) by finding comparable employment.
The key words here are reasonable and comparable. Employees are not expected to make finding new work their new full time job. Likewise, employees are not expected to go and find just any job; a software engineer does not have to accept a line-cook position. The catch is that once an employee accepts a new job – comparable or not – every dollar earned during their notice period is deducted from any award they ultimately receive.
In Ontario, there was some confusion about this deduction on account of employment income. In Brake v. PJ-M2R Restaurant Inc. (“Brake”)1, the Court of Appeal stated that since employees are not obligated to accept inferior (i.e.: not comparable) employment, income earned from an inferior job is logically not deductible. This statement was made in the Court’s concurring opinion, meaning that it is not part of the court’s legal decision or reasoning. Nonetheless, it created some discordant opinions on the matter, with Stuart and Nadia having been very critical of Brake2 as it went against fundamental principles of law.
Thankfully, the Court of Appeal just confirmed that all employment income offsets compensation during an employee’s notice period, regardless of the kind of job the employee accepted. In Williamson v. Brandt Tractor Inc. (“Williamson”)3, the employer appealed a trial decision awarding the employee wrongful dismissal damages.
The Court of Appeal agreed that the trial judge erred by refusing to deduct the employee’s income earned during the notice period because it was from a “lower-paying or ranking position”. The Court clearly stated that the paragraphs the trial judge cited from Brake are not the law, as these are from a concurring opinion. The Court highlighted that the state of the law is articulated by the majority decision in Brake, which is that all employment income earned during the notice period will be deducted; it is not relevant if the job is an “inferior” position.
Accordingly the Court allowed the employer’s appeal and ordered that the $32,881.43 earned by the employee during his 17 month notice period be deducted from the damages awarded at trial. Interestingly, the employer was unsuccessful on two other grounds of appeal, those being that the trial judge erred in not finding just cause, and that the trial judge erred in not finding that the employee failed to mitigate. Consequently, the employee won a costs award of $15,000.00.
Pith and Substance
Williamson is a welcome clarification from the Court of Appeal. And it also greatly illustrates the costs-vs-benefits considerations of litigation. Yes, the employer successfully got the employee’s damages deducted, but it had to pay $15,000.00 in costs, plus the costs of pursuing the appeal itself. This reminds us of the decision in Hill v. Canyon Dental Center4, where the employer successfully proved failure to mitigate at trial, which saved the employer approximately $2,000.00 in notice damages.
We always advise our clients to engage in a cost-benefit analysis, and to be strategic. While pursuing failure to mitigate arguments is often not worth it for employers, Williamson reminds us of the strategic value of offering dismissed employees their jobs back (if appropriate), forwarding opportunities for open positions, or providing them with outplacement counseling. For employees, it highlights the importance of getting legal advice whenever a job opportunity arises, as there would likely be an impact on their entitlements.
Whether you’re an employer or an employee, we’d be happy to assist you with any mitigation or employment-related matters you have.
Endnotes
- Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402 (CanLII), <https://canlii.ca/t/h3x8r>, retrieved on 2026-04-22
- Stuart Rudner and Nadia Zaman, “Year in Review,” Canadian HR Reporter, January 15, 2018, https://www.hrreporter.com/opinion/canadian-hr-law/year-in-review/297743.
- Williamson v. Brandt Tractor Inc., 2026 ONCA 272 (Court of Appeal for Ontario, April 16, 2026), https://coadecisions.ontariocourts.ca/coa/coa/en/item/24104/index.do.
- Hill v Canyon Dental Centre Ltd., 2025 ABCJ 163 (CanLII), <https://canlii.ca/t/kffpt>, retrieved on 2026-04-22
