As discussed in a recent blog post by our Labour and Employment Group, an employee who alleges wrongful dismissal has a duty to mitigate their damages by making reasonable efforts to find comparable employment.
In a recent decision,[1] the Ontario Superior Court of Justice reinforced an important principle in wrongful dismissal litigation: employees must comply with their disclosure obligations, particularly where the duty to mitigate is in issue. In an environment where courts continue to apply a relatively low threshold for what constitutes “reasonable” mitigation, Handy provides helpful guidance to employers.
Background
The plaintiff was terminated in November 2024 and commenced a wrongful dismissal action under the Simplified Procedure, seeking approximately $240,000 in damages. He pleaded that he had attempted to mitigate his losses by seeking reasonably comparable employment and claimed special damages for job search and relocation expenses, stating that full particulars would be provided before trial. The parties’ Discovery Plan required full disclosure of all documents arguably relevant to the proceeding in sworn Affidavits of Documents.
The employee’s mitigation disclosure was limited and delayed. His initial Affidavit of Documents contained no mitigation‑related documents. Several months later, he served a Supplementary Affidavit containing only a brief application log listing six positions. The employer advised that it would not proceed with discoveries without the “proper documentation” required by the Discovery Plan and the Rules of the Simplified Procedure, including a resume, Employment Insurance records, and evidence of job search efforts or outcomes.
Eventually, only Employment Insurance records were produced, but not through a sworn affidavit. The employee continued to maintained that no further documents existed and took the position that mitigation could be addressed through oral discovery and undertakings. Discoveries were nevertheless scheduled. The employer did not attend on the basis of its previous objections, which had yet to be addressed.
The employee subsequently advised that he had obtained new employment, but did not produce supporting documentation. In turn, the employer was granted leave to bring a motion for a further and better Affidavit of Documents. In response, the employee produced employment pay statements through an affidavit sworn by a clerk in his counsel’s office shortly before the hearing. The employee did not swear an affidavit, nor was any evidence provided explaining the scope of the searches conducted for mitigation‑related documents.
The Court’s Analysis
The Court ordered the employee to conduct a thorough search for all records relevant to the proceeding, including records relating to his mitigation efforts, and to serve a further and better sworn Affidavit of Documents containing all arguably relevant documents.
The Court reaffirmed that parties to civil litigation must disclose all documents relevant to any matter in issue that are in their possession, control, or power. Under the Simplified Procedure, an Affidavit of Documents must disclose all such documents to the full extent of a party’s knowledge, information, and belief. By swearing an affidavit, the affiant attests that a diligent search for relevant materials has been conducted.
The Court also set out the test for ordering a further and better Affidavit of Documents. The moving party must establish, on a balance of probabilities, that relevant documents exist. The Court noted that this test may be satisfied where a party asserts that no responsive documents exist, but later produces additional materials that contradict that assertion.
Applying these principles, the Court was critical of the manner in which disclosure unfolded. The incremental “trickle” of mitigation‑related documents—often produced only in response to the employer’s repeated requests—together with the late production of Employment Insurance records and the absence of any records relating to the employee’s new employment, demonstrated that the employee had not conducted a diligent search for arguably relevant documents. The Court also noted the absence of any explanation for why certain documents were not included in any sworn Affidavits of Documents.
The Court rejected the employee’s position that mitigation could be addressed through oral discovery and undertakings, holding that this approach is particularly problematic under Simplified Procedure, where discovery time is capped and further examinations require leave. Proceeding without complete documentary disclosure would risk depriving the employer of any meaningful opportunity to test mitigation evidence later produced. Therefore, it was reasonable for the employer to refuse to proceed with discoveries until complete documentary disclosure had been provided.
Significance for Employers
Handy is a helpful decision for employers defending wrongful dismissal claims where mitigation is in issue. The decision reinforces the requirement that mitigation must be tested through proper documentary disclosure. Employees who plead mitigation must disclose all relevant documents that exist and, by swearing an Affidavit of Documents, attest that they have conducted a diligent search for such documents. Discovery is not a substitute for documentary disclosure.
The decision also confirms that courts will scrutinize incremental or reactive disclosure. When mitigation documents are produced only after repeated requests, outside sworn affidavits, or without any explanation of the searches conducted, employers may be entitled to a further and better Affidavit of Documents.
Most significantly, an employer may be justified in declining to proceed with discoveries where “proper documentation” has not been provided in accordance with a Discovery Plan or the Rules. Given the limited discovery time and the uncertainty of obtaining further examinations, courts may recognize that proceeding without proper documentary disclosure can undermine the ability to meaningfully test mitigation evidence later produced.
