What is employee's duty to mitigate their wrongful dismissal damages?

Employer bears heavy onus to prove failure to mitigate.

According to the Supreme Court of Canada, if the defendant argues that the employee could reasonably have avoided some part of the loss claimed, it is for the defendant to carry the burden of that issue. In Michaels v. Red Deer College, [1976] 2 S.C.R. 324 at 4 (S.C.C.).

Laskin C.J. stated:

[i]f it is the defendant’s position that the plaintiff could reasonably have avoided some part of the loss claimed, it is for the defendant to carry the burden of that issue…The employee should be allowed an appropriate amount of time to adjust to his or her situation and plan for the future before strictly imposing the obligation of mitigation and … [a]n employee’s failure to attempt to mitigate for the first few months after termination may be excusable where it is due to distress caused by the termination…[t]he bottom line is that courts will stop short of imposing an undue hardship on the employee. In that regard, it is noteworthy that the courts will afford the employee a brief “breathing space” of one or two months following the date of dismissal before requiring him or her to fulfil the duty to mitigate. The purpose is to allow the employee to recover from the shock of the dismissal.

In order to prove failure to mitigate damages, an employer is required to prove no less than the employee rejected a suitable position or made no effort whatsoever to find other employment. In his Wrongful Dismissal Handbook, at 6-40.9. Mr. Justice John R. Sproat writes:

[i]t is virtually impossible for an employer to prove a failure to mitigate damages in the absence of evidence that the employee rejected a suitable position or made no efforts whatsoever to find other employment.

According to Hadjis v. Morningstar Research Inc., [2006] O.J. No. 1417 (Ont. Div. Ct.):

The learned judge further held that though the respondent's mitigation efforts were "less than satisfactory", she was not prepared to conclude that the evidence justified a discounting of the plaintiffs entitlement on reasonable notice. At page 35 of her reasons, Horkins J. concluded:

"In this case there is no question that the plaintiffs mitigation efforts and documentary proof of such efforts are less than satisfactory. However, I cannot conclude that no efforts were made to find other employment and for this reason I reject the defendant's argument that a failure to mitigate exists that merits a reduction in the notice to which the plaintiff is entitled."

Meanwhile, no plaintiff is required to conduct a fruitless job search as a condition of being awarded damages in an action for wrongful dismissal. According to Laskin C.J. in Veer v. Dover Corp. (Canada) Ltd. [1997] O.J. No. 3821at ¶ 55 (Ont. Gen. Div.):

A plaintiff is not required to conduct a fruitless job search as a condition of being awarded damages in an action for wrongful dismissal. After all, it is the defendant’s wrongful conduct which has put the plaintiff in the position of seeking employment. It seems to me, that following a dismissal in circumstances such as these, it would be unfair to require a plaintiff to subject himself to the added humiliation of further rejection when it is evidence that mitigation is quite unrealistic. A plaintiff must only mitigate if he can.”