Eyes Wide Shut – Admission of a Failure to Look for New Employment Insufficient to Prove a Failure to Mitigate

Is a dismissed employee's admission that he didn't even bother to look for new employment enough to prove that he failed to mitigate his damages? According to the Court of Appeal for Ontario, it is not.

A dismissed employee’s duty to mitigate his or her termination entitlements remains one of the most frustrating and irritating aspects of employment law. Employees loathe the idea that they must actively work against their own short-term financial interests. Employers find the legal test for proving an employee has failed to mitigate such damages nearly impossible.

In Williamson v. Brandt Tractor Inc., 2026 ONCA 272, the Court of Appeal for Ontario succinctly restated two fundamental components of the legal duty: those concerning the employer’s onus to prove a failure to mitigate and when and when and how to deduct earnings when the employee does.

Termination Without Cause “At Any Time” and “For Any Reason” Legally Acceptable? Maybe.

How does a court get around the pesky “any time,” “any reason” issue and find that a contractual termination provision containing such words is legally determinative of an employee’s entitlement? Simple. By failing to engage on the point.

In Li v. Wayfair Canada ULC., 2025 ONSC 2959, the Honourable Justice Grant Dow of the Ontario Superior Court sitting at Toronto bucked the current trend and found the following termination clause to be legally acceptable, “After your probationary period concludes, in the absence of Cause, the Company may terminate your employment at any time and for any reason by providing you with only the minimum statutory amount of written notice required by the ESA or by paying you the minimal amount of statutory termination pay in lieu of notice required by the ESA, or a combination of both, as well as paying statutory severance pay required by the ESA, providing benefits continuance for the requisite minimum statutory period under the ESA and all other outstanding entitlements, if any, owing under the ESA.”

Let’s get into it.

Canadian Human Rights Commission has Primary Jurisdiction for Federal Discrimination Complaints: FCA

When an unjust dismissal complaint under the Canada Labour Code alleges discrimination, does the Canada Industrial Relations Board (the “CIRB”) have jurisdiction to hear it, or must the employee proceed through the Canadian Human Rights Commission instead?

In Kaseke v. Toronto Dominion Bank, 2025 FCA 8, the Federal Court of Appeal affirmed an earlier decision of the CIRB, which held that if the facts giving rise to an unjust dismissal complaint could also ground a human rights complaint, paragraph 242(3.1)(b) of the Canada Labour Code bars the CIRB from hearing it, because the Canadian Human Rights Act provides another procedure for redress. The CIRB may only hear the matter if the CHRC first refers the complaint back.

Where Are We Now? Contractual Termination Provisions Five Years Post-Waksdale.

What is the state of the law of Ontario on termination clauses as of Labour Day 2025?

To say that the Ontario courts’ approach to contractual termination clauses has been a bit of a whirlwind over the last five years might be an understatement. Let’s recall that Waksdale, now nearly as ubiquitous as Bardal or Machtinger, was only released in August of 2020.

That is why I am grateful for Justice Ira G. Parghi’s reasons for decision in Chan v. NYX Capital Corp., 2025 ONSC 4561 (CanLII). Justice Parghi’s reasons provide a textbook summary of the state of the law on termination clauses in Ontario, which I summarize in this post.

When a Mistake Becomes Repudiation: The Risk of Conditioning Termination Pay

An employer’s mistake as to its legal obligations can invalidate a contractual termination provision.

In Perretta v. Rand A Technology Corporation, 2021 ONSC 2111 (CanLII), Justice Andrew A. Sanfilippo held that an employer’s refusal to pay its former employee the two weeks to which she was contractually entitled—unless she first signed a full and final release, constituted a repudiation of the employment contract, thereby entitling her to common-law damages.