Mitigation issues can save an employer months of termination pay and/or gut your termination case, depending on whether you are the employer or employee in a dispute. But what exactly is mitigation? This post sets out the basics. 
During 2023, we saw the Ontario Court of Appeal uphold two decisions awarding notice periods beyond what was believed to be the “24-month cap” at 27 and 30 months respectively.
In another recent Ontario decision, the Court awarded 5.5 months of pay in lieu of notice to an employee with only 5 months of service prior to dismissal, which is significantly higher than the “one month per year” rule of thumb. These decisions create uncertainty for employers given the wide range of potential liability arising from wrongful dismissal claims. Fortunately, there are proactive measures employers can take to avoid this liability.
The duty to mitigate is one of the few employee obligations in a wrongful dismissal dispute, and it can reduce a defendant employer’s liability significantly.
What is the Duty to Mitigate?
The duty to mitigate requires an employee to take reasonable steps to secure comparable employment after they have been wrongfully dismissed. When an employer wrongfully dismisses an employee, unless there is enforceable contract language to the contrary, the employee is entitled to damages for pay in lieu of common law reasonable notice.
Photo by Dustin Tramel on Unsplash
Employers often wonder what the consequences might be if they don’t do everything their lawyer tells them to or, if they don’t get a lawyer at all and just “wing it” when hiring, firing, or dealing with workplace issues like harassment complaints or requests for accommodation.
Of course, it depends. Not every employee is going to be litigious, but a fair number are. It’s generally pretty easy for employees to get legal consultations and a lawyer to take their “wrongful dismissals” on contingency. The barrier to entry can be quite low.
So, what can an employer expect? In today’s post, we will go through the various types of employer-worst-case-scenario employment law damages.
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