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All Notice-Period Earnings Reduce Wrongful Dismissal Damages: Lessons for Ontario Employers from Williamson v. Brandt Tractor
Williamson v. Brandt Tractor (2026 ONCA 272) gives Ontario employers a clear, useful rule on mitigation, wrapped in a cautionary tale about evidence. The Court of Appeal confirmed that money an employee actually earns during the notice period is deductible from wrongful dismissal damages, even when the new job pays less or ranks lower than the old one. That is the win. The rest of the decision is a reminder of how a for-cause termination can come apart: the employer lost on just cause because the incident it relied on was proven only through hearsay, and it lost its broader mitigation argument because it could not show comparable work was available. Employers get the most from this case by reading both halves.
Two other points are just as important. To argue an employee failed to mitigate, an employer must prove that comparable employment was actually available, not merely that the employee did not look for it. And where a dismissal for cause rests on a culminating or "last straw" incident, that incident has to be proven with admissible evidence. Here it was not, and the just cause defence failed despite a long discipline record.
Planning a for-cause dismissal built on a "last straw" incident, or counting on mitigation to shrink a claim?
Both depend on evidence you may not actually have. A culminating incident must be provable, and a failure-to-mitigate argument needs proof that comparable work was available. Get the evidence assessed before you terminate or take a position in litigation.
Call: 1-800-771-7882 Assess My Termination RiskBackground: a long-service salesperson and a customer complaint
William Williamson was a 56-year-old salesperson who had worked for Brandt Tractor for 18 years, covering a large territory in northern and central Ontario. His record was not spotless. Over the years there were customer complaints about his driving, a company truck crash, and discipline under three different managers. Brandt kept him on, and he produced as a salesperson.
On September 1, 2021, Brandt terminated his employment for cause, citing his discipline record and an August 30, 2021 incident in which a customer was dissatisfied with how Mr. Williamson handled a sale. The parties agreed the August incident on its own could not justify dismissal, so Brandt relied on the culminating-incident doctrine, the idea that a final act can be the last straw on top of a record of prior misconduct.
The problem was proof. The only evidence of the August incident was a manager's account of a phone call with the upset customer, recorded in a follow-up email. The customer never testified. At trial (2025 ONSC 2571), Justice Akazaki found Mr. Williamson lacked credibility and acknowledged the discipline record, but held that the customer's version was inadmissible hearsay that failed the tests of necessity and reliability. Without admissible proof that the final incident was a disciplinary offence, the culminating incident was not made out, there was no just cause, and the dismissal was wrongful. The trial judge awarded damages on a 17-month notice period and declined to deduct what Mr. Williamson earned in a lower-paying parts-driving job he took afterward. Brandt appealed.
What the Court of Appeal decided
No just cause, and the finding was entitled to deference
The Court of Appeal agreed the employer had not established a culminating incident. Without admissible evidence from the customer about what happened, Brandt could not turn the August complaint into the last straw that justified dismissal. There was no extricable legal error or palpable and overriding error, so the trial judge's conclusion stood.
No failure to mitigate
Brandt argued Mr. Williamson failed to mitigate by not seeking comparable sales work. The Court rejected this. The employer's burden was to show not only that he did not pursue comparable employment, but that such employment was available and that reasonable steps would have secured it. Brandt did not prove availability, so his choice not to look for sales work did not help the employer.
Actual earnings during notice must be deducted
The trial judge erred by refusing to deduct what Mr. Williamson earned in his new job because it was a lower-paying or lower-ranking role. The Court held there is no authority for that exception; the passage relied on came from a concurring opinion in Brake, not the law. Income earned during the notice period is generally treated as mitigation, so the $32,881.43 he earned had to be deducted.
A partial win on the numbers only
The appeal was allowed only to the limited extent of reducing the damages by the $32,881.43 in mitigation earnings. The just cause and failure-to-mitigate findings stood, the 17-month notice period was undisturbed, and Mr. Williamson, as the largely successful party, was awarded $15,000 in costs of the appeal.
Key lessons for Ontario employers
Prove the culminating incident with admissible evidence
A "last straw" dismissal stands or falls on the final incident. A second-hand customer complaint, however genuine, is hearsay if the customer does not testify. If you plan to rely on a culminating event, secure first-hand evidence and be ready to call the person who witnessed it.
A bad record alone will not carry just cause
Brandt had a documented history of issues with this employee, and the trial judge did not find him credible, yet just cause still failed. The cumulative-misconduct theory needs a proven final incident to anchor it; without that, the prior record cannot do the work on its own.
To allege failure to mitigate, prove jobs were available
It is not enough to say the employee did not look for comparable work. The employer must show that comparable employment existed and that reasonable efforts would have secured it. If you cannot establish availability, the argument will not reduce the award.
You still get credit for what the employee actually earns
The valuable takeaway is that income earned during the notice period is deductible, even from a lower-paying or lesser role. There is no carve-out for inferior positions, so request and use evidence of the employee's actual earnings to reduce the damages owing.
Keep contemporaneous, first-hand records
Document discipline as it happens and capture incidents through people who can testify to them directly. Records that only repeat what someone else said may prove that an event occurred without proving any wrongdoing, which is exactly where this employer's case broke down.
Pressure-test the evidence before terminating for cause
Just cause is a high bar, and the ESA's wilful misconduct standard is higher still. Before dismissing for cause, assess honestly whether the conduct can be proven in court with admissible evidence, because an unprovable case turns a for-cause termination into a wrongful dismissal with full notice.
Could your next for-cause dismissal be proven in court?
Williamson shows that the result turns on the evidence you can actually put before a judge, both to justify the dismissal and to reduce the damages. A review of your case before you act is far cheaper than a wrongful dismissal award.
Book a Termination Review Or call us: 1-800-771-7882How Achkar Law helps employers
Achkar Law advises Ontario employers on just cause assessments, terminations, and the evidence needed to support them. We help employers evaluate whether a dismissal can be defended, structure terminations to limit exposure, advance mitigation arguments, and defend wrongful dismissal claims.
Related resources
For how courts assess just cause and the higher ESA wilful misconduct standard, see our summary of Render v. ThyssenKrupp Elevator (Canada) Limited (2022 ONCA 310).
For support with terminations and the contracts behind them, see our termination and layoff services.
Call us at 1-800-771-7882 for a confidential consultation.