In most cases, a termination of employment will result in some kind of detriment to an employee, especially in terms of financial damage or burdens. This is why the Employment Standards Act and the common law create an obligation for employers to provide employees with notice or pay in lieu of notice if they are terminated without just cause. This notice period or pay in lieu provides the employee with a bit of a buffer while they seek to find an alternative position.

While employers are obligated to provide reasonable notice, employees also have an obligation after a termination without just cause, albeit a lesser-known obligation to mitigate their losses. This is an obligation to actively pursue alternative employment that is comparable to their previous position to lower the employee's damages that resulted from the termination. The reasoning behind this duty to mitigate is that an employer should not be responsible for paying more to a terminated employee because they didn't take the reasonable initiative to try and make up for the lost damages by seeking alternative employment and therefore income. An employee should not be recovering damages for any losses that they could have avoided.

This is not to say that an employee must accept any position offered to them in an effort to mitigate their losses after a termination without cause, however, an employee must make a sincere effort to find acceptable employment. Employees are not required to accept a position that is a substantial reduction in their previous salary or requires them to move or uproot their family. But when searching for comparable alternative employment, employees should be mindful that they do have an obligation to put their best foot forward. The length of reasonable notice can be affected by whether or not the employee can find acceptable employment and whether they genuinely attempted to search for and apply to other positions while keeping a detailed log of the dates, employers and positions they applied to. If an employee has genuinely searched for employment without any reasonable prospects, it may actually increase the notice period.

Mitigation efforts are increasingly important when common law notice is being negotiated. Under the common law, the length of reasonable notice is usually considerably longer than the minimum entitlements under the Employment Standards Act in Ontario. That being said, if an employee drags out the time it takes them to find alternative employment, then it could potentially reduce the length of reasonable notice and or if they can't find employment when mitigating, it may substantially increase the employee's recovery of damages during the notice period, to the detriment of the employer. The duty to mitigate is in place to ensure that employees are actively pursuing alternative employment to mitigate their losses and move forward after a termination. It would be unfair if an employee were to hold out on finding a job so that their previous employer would be faced with a longer notice period to provide pay for.

So, what if an employee decided to put off looking for alternative employment or turned down many reasonable options so as to increase the length of a notice period? There are consequences for failing to mitigate. If an employee has failed to mitigate it may have the opposite effect they intended and might actually decrease the notice period and therefore reduce the damages they are awarded. The employer has the onus to prove that the employee did not uphold their duty and failed to mitigate and that the employee would likely have found comparable employment if they had conducted a reasonable job search. The onus does not switch to the employee to prove that they did mitigate, but an employer has every right to request information regarding the mitigation efforts if they believe an employee may have failed to mitigate. If positions have been refused by the employee, then the employer would have the onus to prove that such a refusal was unreasonable.

If an employer is successful in proving that an employee failed to mitigate in that they did not make a reasonable effort in searching for a new position or unreasonably refused an offer of employment, and a court of law accepts this evidence, then the court may reduce the damages to a shorter period that is in line with when the employee may have been able to work. A court may also choose an arbitrary amount to deduct from the damages if an employee has failed to mitigate.

Our team of lawyers is available to advise both employees and employers on the duty to mitigate and how it may affect them. Reach out to our firm at 705-268-6429.