The Sad State Of The Duty To Mitigate

When an employee brings a wrongful dismissal claim, Canadian courts impose a duty on employees to take reasonable steps to find comparable employment – this is called the duty to mitigate. In theory, this duty is meant to incentivize employees to re-join the workforce as soon as possible after dismissal since the consequence for not complying with the duty can reduce common law notice damages. In practice, courts have set a low bar for what constitutes "reasonable" mitigation efforts by employees. The case law suggests that courts are making it easier for employees to meet the duty with little effort or penalty, frustrating employers who are facing increasing notice periods awards from the same courts.

The trend is concerning. Without a strong mitigation duty to balance the current state of notice period inflation, employers in Canada face yet another workplace obstacle to competitiveness in the global economy.

What is the Duty to Mitigate?

The duty to mitigate requires that a dismissed employee seek out and accept comparable employment to mitigate their losses stemming from the termination of their employment. Employers are only liable for wrongful dismissal damages that arise from losses that the employee could not reasonably avoid, and are meant to compensate for the lack of notice and not to penalize the employer for dismissing the employee.

Therefore, in a wrongful dismissal claim, an employee's mitigation efforts (or lack thereof) can impact damages in two key ways:

1. If an employee fails to actively look for a new job, or limits the success of the job search by seeking opportunities outside their skill set, position level, pay expectations, etc. , employees can expect a reduction or even a denial of wrongful dismissal damages; or
2. If an employee secures employment during the reasonable notice period, the compensation received can offset the wrongful dismissal damages.

The Court's Approach

Employers are required to prove that the employee failed to mitigate their damages. Employers must show (1) not only that the employee's efforts were unreasonable but also (2) that comparable employment was available and could have been obtained with reasonable effort.

Both of these points have become difficult hurdles for employers to prove.

Taking Reasonable Steps to Mitigate

The recent decision of Boyle v. Salesforce.com, 2025 ONSC 2580, demonstrates the difficulty employers face to prove whether mitigation efforts were unreasonable. In this case, the plaintiff in the three months after termination applied for only one job application every five days. He did not engage in any other "upskilling" in this period of time and then stopped applying for any further jobs altogether, instead focusing on obtaining certifications unrelated to his expertise. Despite this minimal effort, the court held the plaintiff had acted reasonably and awarded the employee of eight years of service with 11 months of notice with no reduction for the limited mitigation effort.¹

The Court of Appeal took a similarly generous approach in Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402. There, the employee applied for only one comparable job in the 4.5 months after her termination. Nevertheless, the trial judge – and later the Court of Appeal – found she had made reasonable efforts to mitigate. In assessing reasonable mitigation efforts, the court gave her credit for taking on some limited part-time work in entry level jobs. It even accepted her failed attempts to launch babysitting and cleaning businesses as sufficient mitigation efforts. In effect, rather than taking issue with her failure to apply for any comparable employment, the court treated speculative entrepreneurial ventures and modest part-time work as adequate to meet her duty to mitigate.

The law is meant to encourage dismissed employees to make diligent, practical efforts to secure comparable work, not to experiment with speculative ventures and expect the employer to underwrite the risk if those businesses fail. The Court of Appeal's approach effectively requires employers to indemnify employees for entrepreneurial gambles rather than holding employees to a standard of active, targeted job searching. Taken together, Pateman and Brake reveal that unless an employer comes armed with concrete labour-market evidence, courts are reluctant to penalize employees for weak or unconventional job searches.

Availability of Comparable Employment

Courts will often use a lack of evidence from an employer of comparable employment opportunities to justify why an employee who acted unreasonably is nonetheless entitled to unreduced common law notice.

For instance, in Pateman v. Koolatron Corporation, 2025 ONCA 224, an employee earning roughly $45,796.56 a year, was awarded 24 months of notice at trial, from which three months were deducted by the trial judge for his failure to take reasonable efforts to mitigate.

Despite acknowledging that the employee had engaged in mitigation efforts that were "half-heartful at best", the Court of Appeal overturned the trial judge's modest three month deduction, because the employer had failed to introduce specific evidence of comparable job opportunities. For context, 80% of full-time jobs in Ontario provide comparable or better income to what the employee was earning before the termination of his employment.

The decision in Abbasbayli v. Fiera Foods Company, 2025 ONSC 3240, highlights the same point. In this case, a 13-year security guard was terminated for time theft. The employee admitted he made no effort to look for work for over a year after his dismissal. The court rejected the employee's argument that medical issues prevented him from searching for work.

Despite the employee's complete inaction in looking for comparable employment, the court still refused to reduce the employee's assessed notice period as a result of his failure to mitigate. The court reasoned that the employer had not proven the employee could have secured comparable alternative employment had he tried (which he had not).

These cases underscore a judicial assumption that jobs are not readily available absent specific evidence to the contrary, and demonstrate the high evidentiary burden courts continue to impose on employers. The market reality is that employment rates in Canada provide a positive outlook on the state of the overall job market, and demonstrate that mitigation (in practice) is likely not as lofty a task as it is viewed by our courts.

For instance, as we discussed in our previous blog post on the alarming trend of increasing notice periods in Ontario, employment rates have increased in comparison to decades past.

In fact, the country has seen an uptick in employment in the following major industries from August 2024 to August 2025: Utilities, construction, services-producing sector, wholesale and retail trade, finance, insurance, real estate, rental and leasing, professional, scientific and technical services, educational services health care and social assistance, accommodation and food services, and public administration.²

Conclusion

The duty to mitigate has many important functions: it ensures fairness in wrongful dismissal cases by requiring that dismissed employees take all reasonable steps to limit their losses; it encourages employees to actively re-join the labour market rather than being idle; and it is an important counter-measure to the high severance costs in Canada compared to our global competitors.

But as recent case law demonstrates, mitigation has lost its way.

By accepting minimal efforts as sufficient, and not reducing employee damages in proportion to the failure to mitigate, courts risk turning the duty to mitigate into an empty gesture. Common law notice was never intended to be an accrued and guaranteed annuity for service, but rather an economic bridge to a new job. Devaluing mitigation undermines this intent, and the balance it was intended to strike between employees and employers.

Footnotes

1 This was ultimately reduced to eight months due to an adverse inference following the plaintiff's refusal to produce evidence on his tax returns

2 https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=1410035502

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