What is the “duty to mitigate?”

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What is the “duty to mitigate?”

If you’re fired, and you’re thinking of suing, you have a legal obligation to look for a new job

You’ve just been wrongfully terminated from your employment. While you may be experiencing a whole host of emotions right now, you need to be aware that you have a duty to mitigate your losses – which means you have to look for a new job.

If you don’t look for a job, any money you get from your employer in court might be reduced – or not awarded at all.

I’ve just been fired. Why do I have to do something?

The duty to mitigate is based on the principle that if some of the losses you suffered after being terminated were avoidable, your previous employer is not responsible for them.  Put another way, the purpose of reasonable notice damages is to compensate you in lieu of sufficient working notice and repair some of the harm done to you – not to punish the employer.

If you are making a claim for damages for wrongful dismissal, your previous employer’s most valuable defence is your failure to mitigate. The employer will try to prove that you have not taken reasonable steps to obtain new employment and make up for your loss of income.

What happens to me if I don’t look for new employment?

If your previous employer can prove that you failed to mitigate, or took inadequate steps to mitigate your damages, the Court may either:

  • find that you are not entitled to any damages for wrongful dismissal; or
  • reduce your damages based on the estimated period in which you failed to mitigate. This can include determining the date by which you should have secured alternative employment.

So how do I mitigate?

You have a duty to be pro-active and search for comparable employment. To be clear: this doesn’t mean you have to take any job that comes along.  But you should be looking for comparable work.

Because you’ll want to show evidence of this in any court case you have, we recommend that you document your searches for new, comparable employment as thoroughly as possible.

Keep a journal or record of all online job applications you complete, resumes you deliver, interviews you attend, or recruitment agencies you speak with. Keep track of all prospective employers you have contacted.

It’s also good to keep a record of all income you have received during the reasonable notice period, including income received through Employment Insurance.

Other ways to mitigate your damages could include earning income through your own business initiatives and self-employment. Note that re-education, re-training, or pursuing an entirely new career path may be considered inadequate means to discharge your duty to mitigate.

Like many things in law, the test for mitigation is based on what is reasonable. This means that the extent of your duty to mitigate is variable and depends on your particular circumstances. Among others, some things to consider include:

  • your health;
  • the availability of similar employment;
  • the specialized nature of your skills and knowledge;
  • the size of your community;
  • whether you should accept a position with a lower rate of pay or reduced hours;
  • whether you are required to accept an offer of reemployment with your previous employer; or
  • whether you are required to move.

To understand what reasonable means for your situation, we recommend speaking with an employment lawyer.

DISCLAIMER: The content of this article, and this website generally, is not intended as legal advice and cannot be relied upon as legal advice.  To provide legal advice on your problem, a lawyer must first understand your specific situation.

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