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Wrongful Dismissal in Alberta: Fixed Term Contracts and Mitigation

Most contracts of employment in Alberta are, by their nature, indefinite contracts of employment. From time to time we have dealt with fixed term contracts of employment. There is an issue which arises in these cases that was recently clarified by the Alberta Courts.

One of the main issues that can trip up employees is mitigation. In employment law, mitigation means employees have to take steps to minimize their loss, mainly by applying to similar jobs to ones they held. There was a line of cases in other provinces, principally Howard v Benson Group Inc (The Benson Group Inc)2016 ONCA 256.

In the case of Rice v Shell Global Solutions Canada Inc, 2019 ABQB 977, the court said at paragraph 78:

In Stewart, Justice Germain stated:

The law in this area is unclear and not completely reconcilable. I believe a reasonable statement of the law is:

While a few earlier cases held there is no duty to mitigate where a fixed term contract is breached, the majority of modern cases have held that an employee whose definite-term contract is breached must still mitigate his or her damages or that, in any event, any sums earned within the balance of the contractual term must be deducted from the employer’s liability...

The Court went on to say:

[79]The weight of authority at the trial level in Alberta applies mitigation principles as recently as 2016 in published decisions....

This matter does not appear to be definitively decided in Alberta, as it has not been decided by the Court of Appeal.

If you have been terminated from a fixed term, or indefinite contract of employment, please feel free to contact us for assistance.

The information contained in this article is not legal advice. No solicitor client relationship is formed through this article. The reader is encouraged to retain counsel for advice in these matters.

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