Duty To Mitigate As Per Employment Law

The duty to mitigate refers to a common law in Ontario Province that requires an employee, who has been terminated or wrongfully dismissed from their job to look for a new job in their notice period. This law requires the employee to make reasonable attempts to find a new job so that they can minimize losses or the damage that they have suffered after being dismissed from their job.

However, this doesn’t mean that they are obligated to accept offers from just any other job. The employee must ensure to keep applying to suitable opportunities that are in some way similar to the ones that they have been terminated from. For determining whether or not the new job opportunity is similar to the one that you have been terminated from, you can compare it in terms of remuneration, status, and a number of hours.

The employees are in no way obligated to accept the job just for any position. For example, a manager is not obligated to accept the job of a waiter in a restaurant. The court also says that it is not mandatory for employees to start looking for a job right away after being terminated from a job. In the eyes of the court, it is considered reasonable to take a break of few weeks before beginning the search.

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Money Deducted From The Duty to Mitigate

If an employee is terminated from his or her job then, by law they are required to make reasonable efforts to find a new job which is called the duty to mitigate. But the employer also needs to provide the employee with a notice period during which they must pay severance to the dismissed employee.

In his or her efforts to find a similar job, if they have been successful then the remuneration earned from that job will be deducted from the severance pay of the previous job until the notice period.

For example, if the employee was earning $100,000 at the previous job and the employer has provided 12 months of notice period to the terminated employee and the new job is paying $60,000, so the $60,000 will be deducted from the severance, meaning that the former employer will only have to pay $40,000 as severance.

On a different note, if the employee was earning some extra amount that they would have continued to earn if they were not dismissed from their position then it will not be deducted from the severance. For example, if the person in question was doing 2 jobs at the time of termination so the income earned from the second job will not be deducted from the severance.

“If the trial judge finds that the new job is comparable to the old one, the earnings should be deducted as mitigation of damages. If the trial judge finds that the new job is vastly inferior to the old one, such that the employee would not be in breach of the duty to mitigate if she turned it down, the earnings should not be deducted [emphasis added],” Brake v. PJ-M2R Restaurant Inc.

What Happens If Someone Fails The Duty To Mitigate?

As mentioned above, the duty to mitigate is a rule that must be followed by an employee to minimize the damages. And the income earned from the new work should be deducted from the severance paid by the employer.

In case an employee fails to find a new job because of their lack of effort and carelessness, or does not apply to any jobs, or is even applying only to unlikely jobs then the judge is eligible to cut the severance of several months from the notice period.

If you need legal advice on duty to mitigate for a specific case, then contact De Bousquet Laywer in Hamilton now!