FAQ's Cases - Stewart McKelvey

Page: 21If the contract entitles the employee to payment ofmoney, howsoever calculated, on termination, that rightto that money is contractual. As such, the parties werenot bound to specify an entitlement that is equal or evenanalogous to the quantum of reasonable notice that thecommon law might require if the contract was silent …Some employees may be able to negotiate a richgolden parachute on involuntary termination withoutcause which enormously exceeds what the common lawmight order by way of reasonable notice. It would nothave much logic to say that such a clause ‘mitigates’against the common law damages as such a clausereplaces the common law right in the first place.2012 ONCA 425 (CanLII)[54] Graham raises similar concerns regarding the potential for unfairness tothe employer that could arise if a duty to mitigate were not imposed on theemployee. Graham states, at para. 53, that to not require an employee tomitigate when a fixed term of notice is agreed to in the contract “would seem tobe an unfair result for the employer simply because the parties tried to agree inadvance on the proper notice”. I do not share this concern for a number ofreasons.[55] It is worthy of emphasis that, in most cases, employment agreements aredrafted primarily, if not exclusively, by the employer. In my view, there is nothingunfair about requiring employers to be explicit if they intend to require anemployee to mitigate what would otherwise be fixed or liquidated damages. Infact, what is unfair is for an employer to agree upon a fixed amount of damages,and then, at the point of dismissal, inform the employee that future earnings willbe deducted from the fixed amount.