What is the Duty to Mitigate in Ontario?
Employees who are terminated without cause are entitled to notice of that termination, and when employers do not give this notice, they are entitled to payment in compensation in place of the notice. This is what is often called severance pay or a separation package. But what is the duty to mitigate in Ontario?
What efforts are considered reasonable for an employee to find new work?
However, beyond the employee’s entitlement, there is the obligation that a terminated employee has to “mitigate” their damages by making reasonable efforts to find comparable alternative employment during the notice period. Courts will examine the employee’s efforts, and often reduce notice period awards (severance pay) on that basis – either to subtract the money an employee does earn during that period, or as a recognition of an employee’s failure to make sufficient efforts to find other work.
However, not every employee’s mitigation efforts will be judged on the same basis. Employees are required to take reasonable steps to look for such work, accounting for the availability of such work and the employee’s own limitations, which the court will consider in assessing their efforts.
What happened in the case of Krmpotic v. Thunder Bay Electronics Limited?
In the recent case of Krmpotic v. Thunder Bay Electronics Limited, 2024 ONCA 332, the court assessed the entitlements of a 59-year old building maintenance supervisor who had been employed for nearly 30 years with the same employer. The employee, Mr. Krmpotic, was dismissed in 2016 shortly after he returned from medical leave following back surgery necessitated by workplace injuries.
Mr. Krmpotic did not look for work following his termination because his injuries prevented him from performing the physical labour required for someone is his position. The trial judge agreed with him, and the court of appeal upheld the decision that there should be no reduction for Mr. Krmpotic’s failure to look for alternative work due to his physical limitations.
How can Whitten and Lublin Help?
Navigating termination of employment can be a daunting and complex process for many employees, and the entitlements and obligations of the employee can be subject to many individual factors. If you are an employee who has been terminated from their employment, Whitten & Lublin is here to assist you. Contact us online or by phone at (416) 640-2667.
Author – Aaron Zaltzman