When an employee is terminated, they are typically entitled to notice or compensation in lieu of notice.
Hilary Page
However, under Ontario employment law, terminated employees also have a duty to mitigate—an obligation to make reasonable efforts to secure comparable employment.
This key concept significantly impacts termination litigation and settlement discussions. See our recent post on terminations for a further explanation of entitlements.
In this article, we’ll break down what the duty to mitigate entails, what reasonable efforts look like, how comparable positions are defined, and best practices for both employees and employers.
1. What Does Mitigation Involve?
The duty to mitigate requires terminated employees to actively seek new, comparable positions. This obligation ensures fairness: employees work to reduce their financial losses, while employers remain accountable for reasonable notice.
When determining notice entitlements under common law, courts consider:
- Age
- Length of service
- Position or role
- Availability of comparable roles in the job market
Mitigation acknowledges that re-entering the workforce can take time and effort. For employees, understanding this duty is key to protecting their entitlements.
2. Reasonable Efforts: What Do Employees Need to Do?
To meet the duty to mitigate, employees must take reasonable steps to find comparable employment. Common examples include:
- Updating resumes and cover letters
- Networking through emails and meetings
- Applying for relevant roles and attending interviews
Nothing too unexpected there!
Failing to make these efforts—or pursuing unrelated activities, such as retraining for a new career—can negatively affect entitlement claims.
3. Defining Comparable Employment
A comparable position aligns with the terminated employee’s previous role in:
- Pay and benefits
- Working conditions
- Responsibilities and status
For example:
- A fast-food employee would find comparable work in another quick-service restaurant.
- A specialized professional, such as a specialized construction worker, may take longer to secure comparable employment due to the rarity of such roles.
4. Employers’ Role: Proving a Failure to Mitigate
Employers have the burden of proving that an employee failed to mitigate. This involves demonstrating that:
- The employee didn’t take reasonable steps to secure new employment.
- A comparable position was available and could have been obtained with reasonable effort.
Employers can reduce legal risks and support mitigation by:
- Providing reference letters
- Offering outplacement services
- Sharing leads for suitable job openings
5. Mitigation and Termination Litigation
Mitigation often becomes a focal point in termination disputes. Employees should:
- Document job search efforts, including resumes sent, interviews attended, and networking activities.
- Retain evidence of applications, rejections, and correspondence to demonstrate diligence.
Employers, in turn, should prepare to provide evidence of job availability and any support offered during the termination process.
Conclusion: Why Mitigation Matters
The duty to mitigate is a shared responsibility between employees and employers. Employees must take reasonable steps to find comparable work, protecting their notice entitlements, while employers can strengthen their position by supporting re-employment efforts.
Navigating the complexities of termination and mitigation requires sound legal advice. Whether you’re an employee seeking guidance or an employer managing a termination, contact Greenwood Law, we are here to assist.
