Mitigation - Articles & Videos

A recent decision of the Ontario Court of Appeal is an important reminder of how costly fixed term agreements can be for businesses when they are not used correctly.

All employees who are dismissed have a duty at common law to mitigate their damages by finding comparable replacement employment as quickly as possible.

Can an employer dismiss an employee, then change its mind, unilaterally retract the dismissal, and require that the employee continue to work? The answer to this question is currently unfolding before the world in real time.

You might know that employees have a legal obligation to mitigate their damages when they are let go, which means they must make reasonable efforts to find new employment. However, what does “reasonable efforts” even mean?

Losing a job is nerve-wrecking for most people. Employees must be careful, however, because they have a duty to mitigate their damages by taking reasonable steps to find comparable employment. Otherwise, their entitlement to damages for wrongful dismissal may be substantially reduced.

There are certain circumstances in which the duty to mitigate does not arise. The first is where there is a termination clause in an employee’s employment agreement which does not expressly require an employee to mitigate their damages during the applicable period of notice. The second is with respect to an employee’s minimum statutory entitlements under employment standards legislation, including an employee’s entitlement to notice/Termination Pay and Severance Pay, which an employee is entitled to receive regardless of their mitigation efforts.