Court Clarifies Employer’s Burden to Prove Failure to Mitigate in Summary Judgment Case

In the recent decision of De Castro v. Arista Homes Limited, the Ontario Superior Court of Justice clarified the extent of an employer’s burden when alleging that an employee failed to mitigate damages by seeking comparable work in a wrongful dismissal case. The plaintiff, Ellen De Castro, was awarded eight months’ damages in lieu of notice of termination, and additional compensation for lost benefits, despite her employer’s argument that she had failed to mitigate her damages.

The court clarified that merely alleging a failure to mitigate would be insufficient without substantive evidence. An employer will be expected to demonstrate, on a balance of probabilities, with reference to specific jobs an employee could have applied for, that the employee failed to take reasonable steps to secure comparable employment. Additionally, courts may expect employers to assist in the employee’s job search by offering resources such as job leads, job counselling, or reference letters-none of which the defendant provided in this case. The defendant relied solely on LinkedIn profiles of individuals who had secured jobs during the plaintiff’s unemployment, which the court found inadequate, particularly given the challenges posed by the COVID-19 pandemic and the plaintiff’s personal circumstances.

This case, decided in an expedited manner through a summary judgment motion, serves as a reminder for employers that to successfully argue a failure to mitigate, they must be proactive in gathering evidence and providing support to departed employees during their job search. For employees, this ruling underscores the courts’ recognition that mitigation efforts need only be reasonable, not perfect, especially in difficult circumstances.

To read the full decision, visit: https://canlii.ca/t/k3bkw