By default, employees who are terminated without cause are entitled to damages for ‘reasonable notice’, i.e. how long it would generally take for someone in their circumstances to find comparable work. However, the employee is also subject to a duty of mitigation. You may be asking, what is the duty to mitigate? While this is not a particularly onerous duty, it would serve employees well to understand their obligations (and potential exposure) from this duty.
What is the duty to mitigate in employment law?
Importantly, if an employee does find a job at the same or greater salary during the reasonable notice period, they no longer have an entitlement to reasonable notice damages beyond their start date. Reasonable notice is meant to put employees in the same shoes they would have been in, but for their dismissal. If the employee is making the same amount they were making before, they are in those ‘same shoes’; there are no damages to make up. Employees cannot ‘double dip’ in these circumstances.
What happens if an employee takes a job at a pay cut, in order to make ends meet while litigation is ongoing? Then, the employee still has a claim to the ‘delta’ in salary. That means that from the date of re-employment to the end of the notice period, an employee can still claim the shortfall in their new job’s salary.
For example, assume an employee was making $100,000.00 and had a reasonable notice period of 12 months, and they re-employed at a salary of $50,000.00 after 6 months. With their old job, they would have made $50,000.00 over the last 6 months. But with the new job, they would make $25,000.00 over the same period. Thus, the ‘delta’ for the remaining 6 months would be $25,000.00.
While most matters settle before going to trial, if a wrongful dismissal matter does make it to trial, the issue of whether an employee fulfilled their duty to mitigate will likely be relevant.
Crucially, it is the employer’s burden at trial to prove that an employee failed to mitigate. At trial, there is a two-part test the employer must prove to demonstrate that an employee failed to mitigate.
What is the employer’s burden in the duty to mitigate?
Firstly, the employer must demonstrate that the employee did not take reasonable steps to look for a comparable job. This is generally a very easy standard to meet for employees. Mitigation efforts need not be perfect; only reasonable.
Sending out a few job applications a week will generally suffice. Non-application efforts, such as networking and re-skilling, also count as mitigation efforts. Further, a dismissed employee need not apply for any position that pops up. They can limit their efforts only to positions that are genuinely comparable.
Secondly, the employer must prove that a comparable job was available that the employee would have gotten, but for their lack of sufficient mitigation efforts. This makes it extremely difficult for an employer to succeed in a mitigation argument.
Just claiming there are jobs out there will not be enough. Employers would need to provide examples of job postings, industry reports, or testimony from employment experts that demonstrate that the employee could have re-employed if they tried harder. Considering the competitiveness of today’s job market, proving this is a tall order for employers.
What happens if an employee fails to mitigate?
If a court finds that an employee failed to fulfill their duty to mitigate, the length of the reasonable notice period for which damages are awarded can be decreased. Exactly how much is taken off the top depends on the specific circumstances of the failure to mitigate.
The duty of mitigation is incumbent upon almost all employees who have been terminated without cause. While there is a heavy burden on the employer to demonstrate a failure to mitigate, being aware of the obligations placed on dismissed employees can help you maximize any award or settlement for wrongful dismissal. Keeping detailed logs of your mitigation efforts, along with proof of same, i.e. confirmations of job applications, will help strengthen your claim. Even before stepping into a courtroom, having proper logs of your mitigation efforts can give you more leverage in negotiations.
An experienced employment lawyer can guide you through every step of a wrongful dismissal claim, including what is the duty to mitigate. If you have any questions regarding a terminated employee’s duty to mitigate, please contact Whitten & Lublin online or by phone at (416) 640-2667 today.
Author – Sohrab Naderi
