Like many questions in law, the answer is – it depends. In this instance, the better question is ‘how much income are you earning while you are looking for work?’
Generally speaking, the rule is that any employment income will be deducted from your severance entitlement. If you are able to find something at exactly the same status as you had before, with the same wages, benefits and everything else, that of course is considered mitigation income. The reality though is that your new job may not be 100% of what you had before – your salary may drop by 5 or 10%, or your benefits package may not be as strong. This is still considered mitigation income, but as your lawyers we may argue that you should be compensated for the difference.
However, suppose you are having zero luck finding anything remotely comparable, and the only thing you’ve been able to find is low skilled work at a fraction of your former income. In one noted case in Ontario for example, a former restaurant manager had gone from her high-status position, to working as an overnight manager at a hardware store at roughly minimum wage. In that instance, the Courts ruled that the significantly lower income that she was earning, which she needed to merely survive, should not be held against her.
