In previous blogs, we talked about constructive and wrongful dismissals. In both instances, terminated employees have what is called a duty to mitigate. But what exactly is this duty and what does it mean for recently-dismissed employees? What is the scope and character of this duty?
What Is The Duty To Mitigate?
The duty to mitigate, in its most basic sense, means that an employee terminated without cause or constructively dismissed must make reasonable efforts to find new employment.
The reason for providing reasonable notice or compensation in lieu thereof is to give employees the time necessary to find a new job. The duty to mitigate is intended to offset former employer’s termination payments under the belief that an employer’s liability is limited to their former employee’s ability to obtain alternate work. However, employees are not expected to take employment that is not comparable to their former position.
In the case of a constructive dismissal, an employee may be required to accept re-employment with their former employer in order to mitigate damages. This is only the case if the terms of re-employment are not fundamentally different from those before the constructive dismissal and only if personal relations in the workplace remain amicable.
Courts will decrease the compensation owed to an employee according to how much they earn from other income sources during the reasonable notice period. Employers are not expected to continue paying their former employees after they have found comparable work, even if they did so before their notice period has passed.
How Determine Damages Awarded To Dismissed Employees
To determine the damages awarded to a dismissed employee, courts will:
- Determine the reasonable notice period according to the employee’s employment contract and the Employment Standards Act (ESA)
- Determine the amount of money they would have earned during the notice period if they had not been fired
- Subtract from this amount their earnings from other income sources during the notice period
- Award the employee the difference between these amounts
Example of Calculating Damages for Dismissed Employees
Let’s say you have been terminated from your job of 5 years where you earned $15 per hour for a 40-hour week. You were dismissed without cause or notice. Under the ESA you are entitled to 5 weeks’ termination pay in lieu of notice. So, after leaving your job your former employer will continue to pay you $600 per week for 5 weeks. Happily, after two weeks you find a new, comparable job that pays $14.50 per hour, also for a 40-hour week. At this point you will stop receiving your full termination pay from your former employer. Instead, for the remaining three weeks of your notice period, you will receive the difference in wages between your old and new jobs ($0.50 per hour). Accordingly, you will receive $20 per week from your former employee for the remaining three weeks of your notice period.
If a court finds that an employee has failed to mitigate, they may not be entitled to any damages or, alternatively, reduced damages based on the period of time during which they failed to mitigate.
Onus On Employers
Fortunately for a recently-dismissed employee, the onus to prove that you have failed to mitigate lies with your former employer. It is up to them to prove that you did not make reasonable efforts to mitigate their damages before a court. In order to do so, an employer must prove that you could have found a comparable position with similar compensation if you had made a reasonable effort to do so.
Document Your Mitigation Efforts
If you want to start a wrongful or constructive dismissal action it is important that you document your mitigation efforts. This means carefully logging your job searches and applications during your reasonable notice period. Failing to take reasonable steps to mitigate may result in your notice period being reduced by the courts.
Employment Law Experts
KCY at LAW’s team of employment law experts can help you navigate the labyrinth of documentation necessary for you to successfully demonstrate the fulfillment of your duty to mitigate and ensure that you receive your full termination pay entitlements. Call KCY at LAW to book your consultation: (905) 639-0999 or contact us online now.