Summary judgment has increasingly become a process used to
litigate wrongful dismissal actions. It can be attractive as it
allows the parties to avoid going through a more costly and
time-consuming trial. However, the efficiency of this process
raises other issues. Because parties can bring a summary judgment
motion early on in the proceedings, a decision may be rendered
prior to the expiry of the reasonable notice period at common law.
This raises the question as to how to deal with the issue of
A recent decision of the Ontario Superior Court, Paquette v. TeraGo Network
Inc., addresses this issue. The case was heard on a
summary judgment motion. The plaintiff, Mr. Paquette, was dismissed
from his employment without cause on November 25, 2014, after
approximately 14 years of service. The motion judge found that the
reasonable notice period at common law was 17 months. The
motion judge also determined that the plaintiff had made reasonable
efforts to mitigate to the date of the motion, although he had been
unsuccessful in obtaining any new employment.
With respect to the issue of the duty to mitigate where judgment
is granted prior to the expiry of the reasonable notice period, the
motion judge outlined the three approaches found in the case
The Contingency Approach: Under this
approach, the plaintiff's damages are reduced by a contingency
The Trust and Accounting Approach: Under
this approach, the plaintiff is awarded the full amount of the
reasonable notice period award, but must account for any mitigation
earnings made during the balance of the reasonable notice
The Partial Summary Judgment Approach:
Under this approach, the plaintiff is awarded partial summary
judgment and the parties must return to court at the expiry of the
reasonable notice period to deal with the outstanding issue of
The motion judge held that the Trust and Accounting Approach
should be applied. In doing so, he explicitly rejected the Partial
Summary Judgment Approach as being "cynical, patronizing,
unfair, impractical and expensive".
The Trust and Accounting Approach provides little incentive to
the former employees to actively mitigate their damages. As was
noted in a previous decision, Russo v. Kerr, this
approach provides a theoretical duty to mitigate, but on a
practical level the plaintiff will have no incentive to earn any
income during the balance of the reasonable notice period.
Furthermore, under this approach it will be extremely difficult for
an employer to prove the employee failed to mitigate, or that the
employee had mitigation earnings that he or she failed to disclose.
If courts continue to adopt this approach, it will make
summary judgment a much less favourable route for employers,
especially in cases of employees with entitlement to long notice
periods at common law.
Employers faced with a decision awarding damages on this trust
and accounting basis may consider entering into a written agreement
with the plaintiff, providing that should the plaintiff secure
alternate employment during the balance of the awarded reasonable
notice period the plaintiff would be entitled to keep one half (or
some portion) of the monies that would otherwise be refundable to
the employer. This would provide incentive for the employee
to mitigate, securing a windfall for them if they do, and
simultaneously saving the employer at least some portion of the
This past year has been marked with significant changes to employment legislation, and watershed decisions that will affect employers for years to come. We've designed this year's conference to deliver a practical and digestible review of what you need to know to manage your employees effectively.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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