The recent decision of the Ontario Court of Appeal in Williamson v. Brandt Tractor Ltd. tempers the often-cited case of Brake v. PJ-M2R Restaurant Inc. by holding that earnings from an inferior job during the reasonable notice period should generally be treated as mitigation of loss.
The “Inferior Employment” Analysis for Mitigation
In her concurring opinion in Brake, Justice Feldman suggested that when an employee accepts new employment during the notice period, whether those earnings count as mitigation depends on how inferior the new job is compared to the employee’s previous position. When the position was substantially inferior to the previous position and taken out of necessity, those earnings would not be deductible as mitigation income during the period of reasonable notice. This view was initially seen as favourable to employee counsel.
Applying the Brakes
However, Williamson clarifies the law in Ontario. The Court of Appeal emphasized that Justice Feldman’s view in Brake was only a concurring opinion and was not adopted by the majority, so it does not reflect the current state of the law. The Court went further, stating there is no authority for the proposition that earnings from an inferior position are exempt from mitigation. It endorsed the majority’s reasoning in Brake, confirming that, absent exceptional circumstances, income earned during the reasonable notice period will generally reduce damages.
Failure to Mitigate Still a High Bar: Employers Must Prove Available Comparable Work
The Williamson decision was not a complete victory for employers, however. The Court did reaffirm that the bar for proving a failure to mitigate remains a high one – a victory for employees. As observed by the Court of Appeal, it is not enough for an employer to argue that an employee failed to look for work in their respective field as part of their mitigation obligation. The employer must also establish that suitable jobs were available to the employee and that, had the employee taken reasonable steps, they likely would have obtained comparable employment. In Williamson, the employer’s unsuccessful establishment of suitable jobs that were available to the employee caused their mitigation argument to fail.
In sum, the Williamson decision offers important clarification on two key principles of employment law and is likely to be referred to by both employer and employee counsel in the future.
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