Ontario’s Court of Appeal has upheld a lower court ruling that Koolatron Corporation wrongfully dismissed a 29-year employee — and it increased the damages awarded due to errors in the trial court’s mitigation deductions.
The Court of Appeal rejected Koolatron’s arguments that D.P. voluntarily retired and that he failed significantly to mitigate his losses by seeking alternative employment or accepting part-time work offered by the company.
Additionally, the court agreed with D.P.’s cross-appeal, which identified a mathematical error in the calculation of damages by the trial judge.
Termination vs. retirement
The trial judge had concluded that D.P. was terminated without cause, rejecting Koolatron’s argument that D.P. had retired voluntarily. The Court of Appeal found ample evidence supporting this conclusion, noting Koolatron provided D.P. with a written termination notice citing shortage of work, which made no mention of retirement.
Further, the court dismissed Koolatron’s suggestion that hosting a retirement lunch and presenting D.P. with a gift indicated retirement, describing such arguments as “wishful thinking.”
Mitigation efforts and job availability
On appeal, Koolatron argued that the three-month deduction made by the trial judge for D.P.’s “half-heartful at best” mitigation efforts was inadequate. However, the court emphasized that Koolatron had the burden of proving not only insufficient mitigation efforts but also that reasonable efforts would have resulted in comparable employment.
The Court of Appeal found Koolatron failed to provide any evidence of available comparable positions within reasonable proximity to D.P.’s residence.
Consequently, the court stated, “there was no basis for a deduction of more than 3 months based on a failure to mitigate.”
Indeed, due to Koolatron’s inability to demonstrate available job opportunities, the court concluded the three-month mitigation deduction itself was unjustified.
Part-time employment offer
Koolatron also contended that D.P. was obligated to accept part-time employment it offered. However, the Court of Appeal supported the trial judge’s finding that no concrete, clearly communicated part-time employment offer existed.
The vague terms presented by Koolatron meant D.P. was under no obligation to accept, and his decision not to take up the part-time role did not constitute a breach of his mitigation duties.
Correction of damages calculation
D.P.’s cross-appeal highlighted a mathematical error in the original damages calculation. The trial judge mistakenly deducted income twice from D.P.’s damages — first by using a monthly income figure already reduced by earnings during the notice period, and again by deducting the same earnings separately.
The Court of Appeal corrected this by recalculating the monthly income based on D.P.’s original loss amount before deductions, resulting in a revised monthly income of $4,116.70.
With the erroneous three-month mitigation deduction reversed, the Court recalculated damages based on a 21.5-month notice period, increasing the total award from $70,603.08 to $88,509.05 — an increase of $17,905.97.
Final disposition
The appeal by Koolatron was dismissed entirely, while D.P.’s cross-appeal was allowed. Consequently, the damages awarded to D.P. were increased, and Koolatron was ordered to pay $15,000 in costs for the appeal and cross-appeal, inclusive of disbursements and taxes.
For more information, see Pateman v. Koolatron Corporation, 2025 ONCA 224 (CanLII).
