In employment law, “mitigation” usually refers to the duty on a dismissed employee to search for employment, or to a reduction in severance pay damages because of income earned after dismissal.
Mitigation Services
Mitigation Process
In any legal case involving breach of a contract, the court must consider if the wronged party has done enough to try to reduce the damages they have suffered. This is called the “duty to mitigate”.
In employment law, the duty to mitigate requires an employee who has been wrongfully dismissed to search for replacement employment during their reasonable notice period. If the employee gets a job during that reasonable notice period, the severance damages their prior employer owes them are normally reduced by the amount of their new income for any overlapping periods.
Mitigation Rules
An employee who has been wrongfully dismissed is not obligated to move heaven and earth to get a new job. They are also not required to look for jobs that are significantly worse than the job they lost. They are required to look for “reasonably comparable” employment.
Reasonably comparable employment is employment that is similar in terms of compensation, job duties, hours, prestige, and other factors.
In a wrongful dismissal lawsuit, a dismissing employer will always argue that the employee has “failed to mitigate” by not making enough effort or turning down a reasonably comparable job.
Determining what is a reasonably comparable job is difficult, and the consequences can be severe. If an employer is successful in arguing a failure to mitigate, the judge will reduce the severance pay the employer would otherwise have to pay the employee.
If the employee obtains alternative employment of some kind during the reasonable notice period, the employer will normally owe less in severance pay.
Sometimes income does not result in a reduction in severance damages, and complex mitigation questions will arise where the employee starts a business or consulting firm after termination. All of these cases will require an employment lawyer to assess and advise on.
Cautionary Notes
- Refusing a job that pays significantly less will not usually be a failure to mitigate.
- Refusing a job offer for a job in another province or country will not usually be a failure to mitigate.
- Terminated employees should keep records of all job search activities, and should not turn down comparable jobs without a good reason.
- Terminated employees should get legal advice on what they need to do to look for employment during the reasonable notice period.
Mitigation FAQ
Do I have to look for work after having my employment terminated?
If an employee is terminated but has not accepted a severance offer, they do usually have an obligation to try to “mitigate” by looking for other work. Potential job sites include Indeed, Workopolis, and Government of Alberta Job Board.
What happens to my severance pay if I get a job somewhere else after having my employment terminated?
If an employee gets a new job shortly after being dismissed, it could result in a reduction in severance pay they are owed. Whether the severance package will be reduced depends when the employee started receiving new income and how much they receive.
Mitigation Legal Blog Articles
Plotnikoff Returns! Termination Clauses and Duty to Mitigate Considered
In Plotnikoff v Associated Engineering 2024 ABKB 706, the Court found a termination clause did not restrict severance and that the employee had not failed to mitigate.
ABKB Unreported – No Failure to Mitigate
Calhoon v J. Quartly Trucking Ltd. (2024) (ABKB), is an unreported ABKB decision where a labourer with 6 years’ service was awarded 8 months notice
ABKB Gives Guidance on Layoff, Termination, Mitigation and Bias
In Northern Air Charter v Dunbar, 2023 ABKB 171, the Alberta Court of King’s Bench dealt with many employment law issues and dismissed a PC appeal
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