By: Stephanie McDonald and Ravi Bhaduri
When your employer terminates your employment, you are entitled to a period of reasonable notice (aka notice or severance pay). This notice period is intended to provide income support during any period of unemployment. While you are unemployed, you are required to make reasonable efforts to secure new employment. This is known as the “duty to mitigate.”
What the Duty Entails
In basic terms, the duty to mitigate requires a dismissed employee to take reasonable steps to limit their financial losses by actively seeking alternate, comparable employment as soon as possible after termination.
- Reasonable Efforts: You are expected to make a genuine, diligent effort to find a new job. This might include updating your resume, applying for positions, networking, and contacting recruiters
- Comparable Employment: You are generally not required to accept a job that is significantly lower in status, pay, or responsibilities
- Prompt Action: While you are entitled to a brief period (usually 2 to 4 weeks, depending on the circumstances) to process the dismissal, after that period, you should act promptly to find a new role
The Importance of Documentation
If your previous employer can establish you did not make reasonable efforts to find a new role, it reduces the severance you are entitled to. Because of this, documenting your job search efforts is essential.
Keep a detailed log of
- Dates of job searches
- The names of the employers and roles applied to
- Copies of job postings and applications submitted
- Records of interviews, including dates and outcomes
The Impact on Severance
If you find a new, comparable job during the reasonable noticeperiod, the income earned from that new role is generally deducted from the severance amount owed by your former employer. A failure to make reasonable efforts could lead a court to reduce or even deny your damages award for wrongful dismissal.
Realities of Negotiation
Yes, employees do have a duty to mitigate by making reasonable efforts to find new work. That’s the legal backdrop. In practice, however, many matters resolve before mitigation ever becomes a live issue, either because negotiations move quickly or because a deal is reached before a new role is secured. This is why compromise can be a strategic choice. To recover a full notice period, employees often have to walk a narrow line, making reasonable efforts to search while not landing a new position too early. In these cases, we are negotiating with that reality in mind, weighing timing, risk, and leverage to achieve the best overall outcome.
Conclusion
The duty to mitigate is an important consideration, but it’s only one piece of a much bigger picture. With good advice and a thoughtful strategy, it can be managed in a way that protects both your legal rights and your financial outcome. Before taking any swift action, it’s wise to pause and speak with an employment lawyer about your options. Book a consultation today.
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Learn more about employment law through the articles below:
- How to Read a Severance Package Like a Lawyer
- Ontario Severance Packages: Why You Should Almost Never Accept the First Offer
- Who is entitled to Reasonable Notice, and how is it calculated?
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While reasonable efforts have been made to ensure the accuracy of the content provided, it does not constitute legal advice. Prior to relying on any aspect of this article, you should consult with a suitably qualified legal professional promptly in your relevant jurisdiction, to obtain advice tailored to your individual circumstances
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