Mitigation
An employee who has been terminated has the duty to mitigate their damages during the period of unemployment. The employee must take the steps that a reasonable person in their situation would in order to obtain similar employment and to accept that employment if it becomes available. This point is addressed in the Ontario Superior Court of Justices decision on Alishah v. J.D. Collins Fire Protection Co. [2006] O.J. No. 4634 where the Trial Judge stated, "An employee who has been dismissed has an obligation to attempt to obtain other employment and make all reasonable efforts to secure a comparable position." However, if an employment opportunity arises which is substantially different, an employee is not under any obligation to accept that opportunity.
If an employee fails to fulfill their duty to mitigate, either by refusing a comparable employment opportunity or by not searching for new employment, then a court may reduce the amount of damages awarded or even decide not to award any damages to the employee as of the date on which the employee failed to satisfy this duty.
The duty to mitigate may extend in some circumstances to an employee having to accept temporary employment from the employer who terminated them. Such a requirement only exists if the temporary reemployment offered is similar to the employee's former role of employment and a reasonable person in the employee's situation would accept the employment. Barriers that may exist which would obviously stop an employee from having to accept this temporary reemployment in order to fulfill their duty to mitigate could be a poisoned work environment due to harassment, or a complete and utter break down in the employee/employer relationship. Refer to Evans v. Teamsters Local Union No. 31 [2008] S.C.J. No. 20 which states:
"...it is an accepted principle of employment law that employers are entitled (indeed encouraged) to give employees working notice and that, absent bad faith or other extenuating circumstances, they are not required to financially compensate an employee simply because they have terminated the employment contract. It is likewise appropriate to assume that in the absence of conditions rendering the return to work unreasonable, on an objective basis, an employee can be expected to mitigate damages by returning to work for the dismissing employer. Finding otherwise would create an artificial distinction between an employer who terminates and offers re-employment and one who gives notice of termination and offers working notice. In either case, the employee has an opportunity to continue working for the employer while he or she arranges other employment, and I believe it nonsensical to say that when this ongoing relationship is termed "working notice" it is acceptable but when it is termed "mitigation" it is not."
For recent court decisions in this area, see our blog.