The mitigation myth is dead

For nearly a decade, a myth haunted Ontario wrongful dismissal litigation. It lived in a concurring opinion, not a majority holding, from a 2017 Court of Appeal decision. Its proposition was elegant and, for dismissed employees, enormously attractive: if a terminated worker takes a lower-paying job out of necessity, the income earned at that inferior position does not reduce their wrongful dismissal damages.

Courts repeated it. Counsel relied on it. Trial judges cited it as settled law. It was none of those things. And now, in Williamson v. Brandt Tractor Inc., 2026 ONCA 272, the Ontario Court of Appeal said so plainly.

The Court of Appeal found:

• The "inferior job" exception to mitigation deduction was never the law in Ontario. It came from a concurring opinion, not the majority.
• All income earned during the reasonable notice period is generally to be deducted as mitigation, regardless of whether the new job pays less or carries less status.
• The burden on employers asserting a failure to mitigate is heavier than many assumed: showing a dismissed employee didn't look hard enough is not enough. Employers must also prove comparable work was actually available.

How the mitigation myth spread

To understand why this decision matters, you need to understand how the myth spread. In 2017, the Court of Appeal released a decision in which two judges in the majority reached one conclusion on mitigation, while a third judge wrote separately. The concurring judge articulated the proposition that became the myth: that income earned in a substantially inferior position should not be credited against damages, because taking that job was not true mitigation at all.

It was a sympathetic argument. Imagine a senior executive, dismissed without cause, who cannot find equivalent work and takes a minimum-wage job to pay the bills. Should every dollar of that minimum-wage income be deducted from what the employer owes? The concurring judge suggested not. The majority said nothing of the sort, their reasons addressed a different question, but the silence was read as assent.

Over the years, plaintiff counsel built positions around this concurring view. Trial judges cited it as binding. In Williamson itself, the trial judge accepted the argument and refused to deduct more than $32,000 the employee had earned at a new, and admittedly lesser, job during the notice period. The Court of Appeal reversed that finding entirely.

The rule around mitigation income

The principle the Court of Appeal has now firmly endorsed is not new, as it was always the law. Mitigation income is mitigation income. When a dismissed employee earns money during the period that would have been their reasonable notice period, that money reduces what their former employer owes. It does not matter that the new job carries less prestige, less pay, or fewer responsibilities. Deduction is the default rule.

The court's language was deliberate. This was not a close call. The “inferior job” exception was never endorsed by a majority of the Court of Appeal. Courts and litigants who treated the concurring opinion as binding were simply wrong.

Taking a lower-paying job is not a reason to ignore the income earned. It is mitigation.

The burden of proof of a failure to mitigate

The second holding in Williamson is just as important, and in some ways more practically significant for employers. Brandt Tractor argued that Williamson had failed to mitigate by not pursuing comparable employment during the notice period. This is a familiar employer argument, and when it succeeds, it can dramatically reduce or eliminate a damages award.

But the court drew a sharp line around what “failure to mitigate” actually requires an employer to establish. It is not enough to point at the employee's efforts and find them wanting. That is only half the test. The employer must also prove that comparable work was actually available, that reasonable efforts by the employee would, in fact, have led to securing a comparable position.

In Williamson, Brandt Tractor could not clear that bar. There was insufficient evidence that a comparable job existed and was accessible to this particular employee in this particular market at this particular time. Without that evidence, the failure-to-mitigate argument collapsed entirely, regardless of how inadequate the employee's job search might have appeared.

The risk of arguing mitigation failure

The good news for employers is on the deduction side. Williamson confirms that income earned in a lower-paying replacement job is not a free pass to ignore mitigation. Employers defending wrongful dismissal claims should press hard on what an employee earned during the notice period, even if that employment was clearly inferior to what was lost. That income counts.

The caution is on the failure-to-mitigate side. Before arguing that a dismissed employee did not try hard enough, employers and their counsel must ask a harder question: can we actually prove that comparable work was available? Anecdotal evidence, general assertions about the job market, or critiques of the employee's search strategy will not be enough. You need evidence of actual comparable opportunities the employee could have pursued and obtained.

Williamson v. Brandt Tractor Inc. is already being flagged as a case that will reshape how mitigation is argued in Ontario wrongful dismissal litigation. Expect it to appear in virtually every case where mitigation is contested, both sides will rely on it. For employers, it offers a clear tool to reduce damages where income has been earned. For employees, it reinforces where the real burden lies when mitigation is challenged.

The myth of the concurring opinion has been laid to rest. What remains is a clearer, more predictable rule, and a reminder that not all judicial commentary carries the weight of law.

Ronald S. Minken is a senior lawyer and mediator at Minken Employment Lawyers, an employment law boutique in the Greater Toronto Area. Tanya (Tejpreet) Sambi is a lawyer at Minken Employment Lawyers.