Date: 06 Mar, 2014| Author: Fred Streiman

The right of an employee to sue an employer who has wrongfully fired or terminated them, is really a subset of contract law.Within that area of contract law is the common issue of mitigation of damages.

Simply put, just because you have suffered a loss because another party has broken their contract with you, you must still make efforts to attempt to reduce those losses. Commonly referred to as mitigation of damages, the simplest example of that in wrongful dismissal is a fired employee must make an effort to find another job.Even if one is terminated unfairly, if you find a replacement job that earns you the same salary or greater, may potentially have no damages and no cause of action whatsoever. This is a gross oversimplification that ignores complicating factors such as damages under the human rights code and properly calculating the damages that one has suffered.

To repeat, if you are wrongfully fired, you need to make a genuine effort to find a replacement job and must be able to prove it.In some cases, the entire issue of what will occur if your employer terminates you is governed by an employment contract. Most employment contracts set out specifically what the fired employee will receive if they are fired without justification.In the recent and interesting 2012 Ontario Court of Appeal decision of Bowes v. Goss Power Products Ltd., the court strictly upheld the employment contract despite the fact that the employee’s damages were virtually nothing.

In that case, the parties had signed an employment contract requiring the employee would receive six months salary if he was terminated without justification. The contract said nothing about the obligation of the employee to mitigate his damages. The employee found a similar paying job within two weeks and the employer felt that there was accordingly no need to pay anything other than the statutory minimum required under the Employment Standards Act (in this case three weeks pay).

While the employer was initially successful at trial, the Ontario Court of Appeal reversed that decision. The Court of Appeal held that a contract was a contract. If the employer wanted that normal contractual obligation of duty to mitigate to be within it, it should have been inserted.This is not the law in the usual case of an employee who is terminated when there is no contract of employment whatsoever. That obligation to find another job and reduce your damages still exists.

One of the civil litigation lawyers at Dale Streiman Law LLP would be pleased to discuss your employment situation.One should note that employees who are governed by a union contract are subject to an entirely different set of rules which are almost exclusively set out in that union contract.

By: Fred Streiman