FAQ's Cases - Stewart McKelvey

Page: 3[5] In his application, the appellant argued that the employment agreement setout the termination payment that was due and owing. He had no duty to mitigateand was accordingly entitled to the amount set out in the employmentagreement. This amount, he stated, should be paid out in a lump sum at the timeof termination. The respondent argued that the appellant’s position was contraryto the settled case law on mitigation and was inconsistent with a reasonable2012 ONCA 425 (CanLII)interpretation of the agreement. The appellant had only suffered two weeks’ lossof salary, which is less than the statutory minimum notice period.[6] The application judge held that, where it contains a fixed severanceentitlement, an employment agreement is subject to a duty to mitigate unless theagreement, either directly or by implication, relieves the employee of thisobligation. Since the agreement at issue provided no such exemption from theduty to mitigate, the appellant was not entitled to the full amount provided forunder the agreement as he had mitigated his loss by finding new employment.The application judge also held that the severance payment was not due as alump sum.[7] The appellant appeals from this ruling. However, he has not appealed thedecision as it relates to the timing of the payment.[8] For the reasons that follow, I would allow the appeal.