Employers must prove both elements of two-part test
When an employer and an employee are in court over a wrongful termination dispute, and the court determines the employee was wrongfully dismissed, the next step is to assess the reasonable notice damages that should be awarded. The primary objective of these damages is to restore the employee to the position they would have been in had the wrongful dismissal not occurred. To do this, courts consider several factors, including the employee’s age, tenure, and job level, among other relevant aspects.
However, employers often attempt to reduce the damages awarded by arguing that the employee failed to mitigate their losses. While this defence is commonly raised, proving a failure to mitigate can be challenging, even under the civil standard of the balance of probabilities.
This article explores the duty to mitigate in wrongful dismissal cases, detailing its scope, who bears the burden of proof, and what is required to successfully argue that an employee has failed to mitigate their damages.
An employee who has been wrongfully dismissed is entitled to receive reasonable notice damages. However, this entitlement is subject to the duty to mitigate, which requires the dismissed employee to make reasonable efforts to secure comparable alternative employment.
The seminal case on post-dismissal mitigation in Canada is Red Deer College v. Michaels,1975 CanLII 15, a decision of the Supreme Court...
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