While the ideal end of an employment relationship is smooth, termination disputes are unfortunately common. One of the possible issues a former employer may raise is an employee’s failure to mitigate their losses by seeking other employment. If an employee fails to fulfill their duty to mitigate, the result may be a reduction in how much they receive in termination pay under the common law notice period.
Each case is different. If you have any questions or concerns about employees’ duty to mitigate, or would like to discuss what may be possible for you, contact our Toronto employment lawyers today for a free consultation.
What Does an Employee’s Duty to Mitigate Mean in Ontario?
In Ontario, an employee has a duty to try to mitigate their losses with regards to a termination. This means they are expected to make an effort to reduce their losses by seeking new work. Compensation provided through statutory minimums under the Employment Standards Act (ESA) or through common law reasonable notice is meant as a bridge between periods of employment. If you have been fired, you have a duty to look for another job.
How Might an Employer Prove That an Employee Failed to Mitigate?
An employer might use an employee’s job search history to prove that they failed to mitigate. Employees might be expected, while pursuing work, to keep track of the jobs to which they have applied, including interviews they have attended. If a disagreement arises, an employee may produce these records as proof that they did indeed fulfill their duty to mitigate their losses.
What Happens if an Employee Refuses to Look for New Work After Being Dismissed?
If an employee refuses to look for new work after being dismissed, they may be found to have failed to mitigate their damages. This means that the compensation they would get through the common law reasonable notice period could be reduced or possibly even eliminated, depending on the severity of their lack of engagement.
What Happens if the Court Finds the Employee Failed to Adequately Mitigate?
If the court finds that the employee failed to adequately mitigate, they may reduce or even eliminate the amount that employee receives in terms of notice. For example, a court may reduce an employee’s entitled common law reasonable notice from six months to three, if they determine the employee failed to mitigate.
What Is an Example of an Employee’s Successful Mitigation?
The most successful mitigation is to find another job. When you find another job, this means the notice period ends. In most cases, successful mitigation is a documented history of the employee trying to apply for jobs. The employee does not have to be successful - they just have to show that they are trying.
How Does Successful Mitigation Affect Severance And/or Pay in Lieu?
Successful mitigation means you have found another job, which means the end of the compensation to which you are entitled for your notice period. If your notice period is nine months, but you find a job in three, then you are only entitled to three months in termination pay. There may be exceptions if your new job is significantly lower paid. Speak with our Toronto employment lawyers to discuss your specific case.
Is Other Employment Income During the Notice Period Deducted From an Employee’s Severance?
If you get another job for which you are being paid, then your new income may be deducted from your severance. Circumstances can vary vastly. Useful guidance may come from specifically discussing your case with an employment lawyer. Our team at Howie, Sacks & Henry LLP would be happy to schedule a no charge consultation and see how we might help.
Contact Our Employment Lawyers Today For a Free Consultation
If you have encountered issues regarding your duty to mitigate following a termination, let us help. Contact us today and schedule a free consultation to see how Howie, Sacks & Henry LLP may be of service to you.
*Please be advised that the content of this article is intended as a general overview on the subject of employees’ duty to mitigate in Ontario, and should not be construed as legal advice. For legal advice, please consult with a Toronto employment lawyer.