If you’ve been terminated from your job and spoken to an employment lawyer you’ve probably heard the word “mitigation” thrown around. In this post, we will talk about mitigation, what it is and why it matters to you and your case.
The Duty to Mitigate
The duty to mitigate is a legal concept that basically means you’ve got to take reasonable steps to stop your own bleeding. What that bleeding looks like will depend on the type of legal case you’re involved in. If you are involved in a personal injury case, mitigation means following doctor’s orders and doing all that you can to recover from your injury. In the context of employment law, the duty to mitigate means trying to get a new job and replace your lost earnings and employment benefits.
What a Notice Period is Really
In most cases, employers can terminate the employment of any employee by providing notice of termination. The amount of notice can be set by the employment contract or it can be set by the common law. Common law is judge-made law, found in court cases, as opposed to legislature made law, which is found in statutes.
Most employment cases, where termination is involved, are about figuring out the appropriate amount of common law notice. Your common law notice period is representative of the amount of time a court thinks it ought to take you to find a new job, taking into account things such as your age, the character of the job you left (including your salary, level of seniority and the industry), how long you were at the job you left, and how long it might take you in your current geographic location and circumstances to find a new comparable job.
Even if you don’t look for a new job, a court will look at your particular circumstances and decide how long they think it should have taken you to find a new job.
Terminated employees cannot be too picky when looking for a new job. The job should be comparable – so this doesn’t mean that a CEO needs to go work at the gas station – but if reasonable offers of employment are made and turned down this will often be seen as a failure of the duty to mitigate. This could even be the case if offers of re-employment are made by the employer who terminated you.
Gent v. Strone Inc
What does failing to mitigate look like in real life? The Ontario Superior Court decision in Gent v. Strone Inc. gives us a glimpse. Mr. Gent was a 53-year-old employee with 23 years of service to Strone. An economic downturn caused Strone to put Mr. Gent on a temporary layoff. Mr. Gent treated the temporary layoff as a termination and sued Strone for wrongful dismissal. Meanwhile, 3.5 weeks after he had been laid off Strone recalled Mr. Gent to work, offering him re-employment. Treating himself as terminated, Mr. Gent did not go back.
The judge in this case decided that Mr. Gent’s temporary layoff did constitute a termination and that he was entitled to reasonable notice of termination. However, instead of awarding Mr. Gent 18 months of notice, which was the amount of reasonable notice that the judge deemed appropriate based on the common law factors discussed above, he reduced his award to 3.5 weeks. Mr. Gent could have mitigated his damages by accepting Strone’s offer to return to work after 3.5 weeks. His failure to do so disentitled him to his common law notice.
If you are an employee who has been terminated you have duty to mitigate your damages and look for a job. You should keep a record of your efforts, in case you ever need proof in court. Any reasonable job offer should be carefully considered, even if you don’t really want it or it’s from the employer who just terminated you. Not taking a job a court deems you should have taken could reduce your notice damages.
Employers should think about mitigation when terminating employees and include clauses in notice package offers that claw back a portion of the notice award if the individual re-employs.
If you’d like to know more about the duty to mitigate, get in touch!