Court of Appeal: The Mitigation Myth is Dead

Ontario Court of Appeal corrects nearly a decade of misapplied mitigation earnings law

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.

What the Court Decided

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.

The Myth

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 Restated

The principle the Court has now firmly endorsed is not new 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. 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

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.

What This Means for Employers

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.

What This Means for Employees

For dismissed employees and their counsel, the mitigation landscape has shifted. The “inferior job” shelter is gone. If you take any income-earning work during the notice period, expect that income to be deducted.

The better news for employees is on the burden of proof point. If your former employer argues you didn’t look hard enough for work, demand that they show you what work was out there. A bare assertion that you should have found something better is not enough. The employer bears the burden of proving not just that your search was deficient, but that a better search would have succeeded.

The Takeaway

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.

How Minken Employment Lawyers (Est. 1990) Can Help

Whether you are an employer defending a wrongful dismissal claim or a professional navigating termination and severance, understanding how mitigation impacts your rights is critical.

Minken Employment Lawyers (Est. 1990) provides strategic, practical advice on wrongful dismissal, severance, and litigation risk, ensuring you are protected and positioned effectively from the outset.

If you are dealing with a termination or dispute, do not leave it to assumption.

If your organization relies on employee-created work, it is critical to ensure your agreements reflect that reality.

Contact Minken Employment Lawyers (Est. 1990) today for a confidential consultation at 905-477-7011 or contact@minken.com to connect with our team.

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Please note that this article is for informational purposes only and does not constitute legal advice or opinion.