M. Christine O'Donohue

Following the release of reasons for judgment in a wrongful dismissal appeal, the appellant made further written submissions arguing that his damages award of $286,000 should not be subject to the duty to mitigate.

The Court of Appeal agreed, finding that a clause in the employment contract requiring a lump-sum payment shortly after termination amounted to a waiver by the employer of any obligation on the part of the employee to mitigate.

The judgment was amended to award the appellant damages equal to two years' salary without a duty to mitigate, and costs were fixed on a substantial indemnity basis.

The appellant was employed by the respondent for 17 years and had an employment contract providing for two years' salary upon termination.

The respondent attempted to unilaterally amend this provision to a maximum of 30 weeks' pay, giving two years' notice of the change.

The appellant explicitly rejected the new term but continued to work.

After two years, the respondent informed the appellant that the new provision was in effect and that he had no job if he refused to accept it.

The Court of Appeal held that the respondent's actions constituted a termination.

Because the respondent permitted the appellant to continue working despite his clear rejection of the new terms, the respondent was deemed to have acquiesced to the original contract.

The appellant was awarded damages based on the original two-year termination provision, less mitigated earnings.