The Duty to Mitigate
Employment lawyers should tell their wrongfully dismissed ex-employee clients about the duty to mitigate. I do – and my advice usually is met with a blank stare or confused expression.
The duty to mitigate simply means that dismissed employees must make reasonable efforts to find replacement employment. If they fail to do so a court will reduce the damages awarded to them. If they succeed in finding employment their damages will be reduced by the earnings in the new employment during the “notice period.”
I get another blank stare when I talk about the Notice Period. Notice Period means the number of months’ notice or pay that a wrongfully dismissed employee is entitled to when their employment is terminated without just cause. An example:
Joe is terminated after 10 years’ service with his employer. Depending on a number of factors, he will be entitled to a Notice Period of likely between two months and twelve months. For the purpose of this example we will use 6 months. If Joe, rather than looking for work, goes on a 6 month vacation, he may be denied severance pay altogether (with the exception of severance pay under the Employment Standards Act – see this blog for an explanation: Employment Law Q and A). If Joe finds an equivalent job after a two month job search he will only recover two months’ severance pay. If Joe’s new job only pays one half of what his former job did he would essence be entitled to be topped up to the level of his former salary and benefits for the notice period.
Dismissed employees should fastidiously record their efforts and activities in finding new employment. It is very difficult for an employer to prove a failure to mitigate when a dismissed employee has produced a record of efforts made to find employment.