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FREQUENTLY ASKED QUESTIONS AND ANSWERS

What happens if the former employee finds new work?

Your former employee finding new work is great news, and can significantly lower your severance obligations. If you have had the employee on a salary continuance arrangement then you have already likely implemented a ‘claw back,’ where once the employee finds replacement income then they are only entitled to a percentage (usually 50%) of whatever amount that remains owing. The law recognizes that they should not be in a windfall position, rather just kept financially stable until they are ‘back on their feet.’

If you are negotiating a settlement, however, a new job could significantly change what you are willing to offer. Hypothetically, if the employee’s lawyer is pushing for a 10-month payment in lump sum, but the employee finds a new job within three, that 10 months is no longer representative of how long it would take them to find new work. This is usually accounted for in negotiations, but even if the case goes before a judge, the court will assess the employee’s mitigation efforts and account for mitigation income when calculating their damages. 

Employment Lawyers - Rudner Law
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Rudner Law
15 Allstate Parkway
Suite 600
Markham, ON
L3R 5B4

Phone: 416-864-8500
Text: 416-864-8500

Email: info@rudnerlaw.ca

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