If an employee chooses to file a claim for wrongful dismissal or constructive dismissal against their former employer, a court will generally examine the efforts made by the former employee to mitigate their damages following their termination. It is a general principle of employment law that an employee who is terminated is required to “mitigate their damages” or make reasonable efforts to find other sources of income.
Below we answer some commonly asked questions about the duty to mitigation.
1) What happens if I find a new job?
If an employee secures employment during their reasonable notice period, then a court/judge may deduct the income that the employee earned during the reasonable notice period from any damage award granted to the employee. Income earned during the reasonable notice period may also impact pre-litigation negotiations.
2) What happens if I don’t look for a new job?
Where an employer proves that a former employee failed to mitigate their damages, or took inadequate steps to mitigate their damages, a court may either:
- find that the employee is not entitled to any damages; or
- reduce the employee’s damages based on the estimated period in which the employee failed to mitigate. This can include determining the date by which the employee should have secured alternative employment.
3) What does the duty to mitigate entail?
The duty to mitigate entails making reasonable efforts to find a similar replacement job. Reasonable efforts may include:
- Updating a resume;
- Asking for references;
- Regularly checking job listing sites online such as Indeed, Monster and Workopolis;
- Regularly checking local newspapers;
- Contacting a Search Firm/Headhunter; and
- Applying for desirable employment positions.
Note that an employee’s duty to mitigate may be impacted by their personal circumstances. For example, if an employee becomes disabled following termination, they may not be required to engage in robust efforts to find new employment. Employees are required to make reasonable efforts to mitigate their damages, and what is considered reasonable may vary based on an employee’s particular life circumstances post-termination.
4) What information about my mitigation efforts should I retain?
To ensure an employee can defend their mitigation efforts in the event that those efforts are challenged, it is advisable for employees to keep a detailed record of their mitigation efforts. The following information should be included in such a record:
- Positions the employee applied for (marking down the name of the employer, your date of application and the position sought);
- The dates and websites the employee searched for job postings;
- The dates and times of any telephone calls the employee made to find work; and
- The dates and times of any interviews the employee had during their job search.
5) What are the limits on the duty to mitigate?
If an employee is unsure about whether they need to take a particular action in order to mitigate their damages they should seek out legal advice.
In general terms, though, an employee who has had their employment terminated has the duty to search for reasonably comparable employment and to accept that employment if it becomes available. However, if the available employment is substantially different from the employee’s former role, the employee may not be required to accept it.
Employees may be expected to accept temporary employment with the employer who terminated their employment in some circumstances, but this requirement only exists if the temporary re-employment offered is similar to the employee’s former role of employment and if a reasonable person in the employee’s situation would likely accept the employment. Where barriers exist (e.g. poisoned work environment), the employee would not be obliged to accept temporary re-employment with the dismissing employer.
If you require more information or have questions relating to a terminated employee’s duty to mitigate, please contact the Toronto employment lawyers at Sultan Lawyers by telephone at 416-214-5111, by email, or by filling out the form below.
Return to Blog