The Blog

Recent cases highlight an important difference between provinces in the treatment of mitigation income after the breach of a fixed-term employment contract. Ontario’s jurisprudence can result in a windfall to some employees, where cases provide for damages to the end of the contract’s term without deduction for income earned in alternative employment. But courts outside Ontario are registering disagreement.

A recent case demonstrates the challenge employers face when seeking reduced damages for an employee’s inadequate attempts to mitigate. The plaintiff in Hucsko v. A.O. Smith Enterprises, 2020 ONSC 1346, made no efforts to find alternative employment after termination, but the Court opted not to reduce his damages because the defendant company did not lead sufficient evidence of the availability of comparable jobs.

A modern trend in the law of contract variation has generated some excitement in the employment law world about whether companies may now be able to change employment contracts without providing fresh consideration (or a new benefit) to employees. That would make life easier for HR professionals. But a recent appellate decision will dampen some of that enthusiasm.

A recent case confirms (briefly put) that there is no substitute for the proper drafting of employment contracts. In Rossman v. Canadian Solar Inc. the Ontario Court of Appeal dealt a significant blow to the utility of “saving clauses” to salvage drafting errors when a termination provision is not compliant with employment standards legislation.

A recent case weighs in on an interesting puzzle in the law of wrongful dismissal damages: How to factor mitigation income into the award when the employee gets new work at significantly higher pay. Kideckel v. Gard-X Automotive Refinish Inc. suggests the jurisprudence is consolidating around a principled approach, holding that an employer shouldn’t get retroactive credit for an employee’s surplus mitigation income.

Employers owe their employees a duty of good faith. Breaching that duty during a termination can lead to expansive liability, as the City of Toronto recently learned the hard way. The case of Headley v. City of Toronto involved an employee who was dismissed on allegations of theft and fraud.