As an ex employee, you do have a duty to mitigate and find a job.
So, you got fired. And I am sure what you want to do is curl up in bed, binge daytime television, and eat tub after tub of Haagen-Dazs ice cream. I hear you. Breaking up is hard to do – especially when your “ex” is your former employer. But before burrowing under your covers, you should know that your Termination Pay may be contingent on your Duty to Mitigate. In other words, if you want to continue being paid after you are terminated, you have to be out there trying to find another job.
To understand this, you have to know what the purpose of Termination Pay is. “Termination Pay,” refers to pay that is provided to you by your employer in lieu of notice of termination. Termination pay is a way that the law ensures that fired employees, who were terminated without cause, are able to remain financially afloat while trying to find another job.
The amount of Termination Pay that you are entitled depends on your statutory entitlements, any contractual limitations, and what the courts consider to be reasonable notice. Reasonable notice depends on a number of factors with the goal of assessing how long an employee, in their line of work, with their amount of experience, at their age, would reasonably take to find comparable employment. A consultation with an employment lawyer will tell you how much Termination Pay you are entitled to.
If the purpose of Termination Pay is to provide you with paid time to find another job, then it stands to reason – you actually have to be out there looking for work. This, in law, is called a Duty to Mitigate.
Now there are a few important principles of Mitigation that you should know:
- Your Duty to Mitigate does not force you to pound the proverbial pavement the moment your employer tells you that you are out a job. The law recognizes that in some circumstances, a brief “cooling off” or “grace” period may be warranted immediately following a wrongful dismissal. Emphasis on “brief.”
- Your Duty to Mitigate does not mean that you have to take any job you can get. If you worked as a Director of Finance at a large corporation making $250,000.00 per year, you do not need to go out and get a job washing dishes at your local pub. What the law requires is that you seek comparable employment. In other words, the jobs you need to be looking for should be in a related area with similar compensation to what you had with your former employer.
- Your Duty to Mitigate does not mean you need to apply to a specific amount of jobs per week. Put another way, there is no magic formula that an employee must follow when satisfying their Duty to Mitigate. Instead, you need to make reasonable efforts to obtain other employment. What is reasonable will depend on the circumstances, with the question being whether the employee stood idly or unreasonably by, or whether he/she tried without success to obtain employment.”
- Your Duty to Mitigate may mean your Termination Pay will be reduced. If your badass-self finds comparable work during the notice period, your earnings from that new job will be deducted from your Termination Pay in mitigation of your damages.
To add complexity…
To add complexity to an already complex area, not all employees who are terminated will have to mitigate their damages. As an example, in the recent case of Howard v Benson Group Inc., our Ontario Court of Appeal held that employees under a fixed term contract whose employment is terminated without cause have no duty to mitigate. Another example would be where an employee’s termination pay is limited – either by contract or by common law – to that which is mandated by statute. An employer cannot legally pay an employee less than what the Employment Standards Act or the Canada Labour Code requires – whether you mitigated your damages or not. It is also important to note that Severance Pay is different than Termination Pay, in that Severance Pay is an earned benefit for long-serving employees of big corporations. It is calculated differently than Termination Pay and is not subject to mitigation.
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