Contracts let employees off mitigation hook

Contractually set severance payments can remove dismissed worker’s duty to mitigate damages by looking for another job
By Nikolay Chsherbinin
|Canadian Employment Law Today|Last Updated: 11/03/2009

No hurry with guaranteed severance?

Damages in wrongful dismissal awards are generally meant to serve as compensation in lieu of the reasonable notice that a wrongfully dismissed employee should have received. The notice period is supposed to serve as a bridge between jobs and provide the employee with an opportunity to find a new job without too much financial hardship. In order to receive these damages, the employee must show she has made a reasonable effort to find work after the dismissal and if she finds a job before the notice period is up, often the employer will be off the hook for the balance of damages in lieu of notice. However, things become a little more complicated if the employee has a contract that guarantees a specific amount of severance pay. Does the employee have to look for work right away if the employer has contractually guaranteed a specific amount in lieu of notice? On the flip side, if the employee does find work quickly, is the employer bound to the amount in lieu of notice specified in the contract?