A Familiar Dispute with a Clear Message on Just Cause and Mitigation

The Ontario Court of Appeal’s decision in Williamson v. Brandt Tractor Inc., 2026 ONCA 272, is a familiar wrongful dismissal dispute, but one that highlights issues employers and employees continue to face: the high threshold for just cause, what mitigation truly requires, and how courts treat post‑termination earnings.

Mr. Williamson was dismissed from his employment with Brandt Tractor Ltd. The employer asserted just cause, relying on a customer complaint it characterized as a culminating incident when considered alongside the employee’s prior work history. The trial judge disagreed and awarded Mr. Williamson 17 months’ pay in lieu of notice. The employer appealed.

Just Cause Requires Proof, Not Suspicion

On appeal, Brandt Tractor argued that the trial judge had misapplied the legal test for just cause. While acknowledging that the correct principles had been stated, the employer maintained that the evidence was sufficient to establish a culminating incident.

The Court of Appeal disagreed. Although it was not disputed that a customer complaint had been made, the employer did not call the customer or otherwise lead admissible evidence establishing what had actually occurred. Without that evidence, the alleged misconduct could not be proven.

The result was unsurprising, but important: even where allegations may appear compelling from an employer’s perspective, dismissal for cause requires evidence capable of meeting a high legal threshold.

Mitigation Is About Opportunity, Not Perfection

The employer also argued that Mr. Williamson failed to mitigate his damages because he chose not to pursue comparable sales employment after his dismissal.

Again, the Court of Appeal was unpersuaded. The Court reaffirmed that the burden rests on the employer to establish a failure to mitigate. That burden is not met by pointing to alternative choices the employee might have made. The employer must also show that comparable employment was actually available and would likely have been secured had reasonable efforts been made.

Brandt Tractor led no evidence of available comparable positions. In that context, the employee’s decision to take a different path did not amount to a failure to mitigate. The Court’s reasoning reflects a practical appreciation of the realities employees face following termination.

Where the Employer Succeeded: Deducting Earnings

The employer did succeed on one issue. At trial, the judge declined to deduct income Mr. Williamson earned during the notice period, reasoning that his new position was lower‑paying and of lower rank. The Court of Appeal held that this was an error of law.

Relying on the majority decision in Brake v. PJ‑M2R Restaurant Inc., the Court confirmed that employment income earned during the notice period is generally treated as mitigation of loss. There is no exception simply because the replacement role represents a step down. While limited exceptions may apply in other cases, they did not arise here.

The parties agreed that Mr. Williamson earned $32,881.43 during the notice period, and that amount was deducted from the damages award.

Takeaways

This decision reinforces that just cause remains difficult to establish and must be supported by evidence, not inference. It also confirms that the duty to mitigate is assessed realistically, with employers bearing the burden of proving both unreasonable conduct and missed opportunity. At the same time, income earned during the notice period will ordinarily reduce wrongful dismissal damages, even where the employee’s replacement job is objectively inferior.