Mitigating the costs of wrongful dismissals

Wrongfully dismissed employees are entitled to damages in lieu of notice, but they have obligations too
By Alex Kowal
|Canadian Employment Law Today|Last Updated: 02/06/2019

Often employees believe upon termination they are legally entitled to lengthy periods of reasonable notice without any obligations and employee counsel will be quick to request same without factoring in the employee’s duty to mitigate. However, employees who are let go have a responsibility to try to improve their circumstances following dismissal, such as conducting reasonable searches for employment. It’s important for employers to understand this employee obligation if facing a wrongful dismissal suit.

A sometimes overlooked, but vitally important, aspect of a wrongful dismissal claim is the terminated employee’s duty to mitigate. Understanding the duty to mitigate — a terminated employee’s obligation to take positive steps to reduce the damages arising from their termination — is obviously important for both employees and employers, especially given the law can sometimes appear unsettled on issues related to mitigation.

The leading case on the duty to mitigate in wrongful dismissal cases is the 1975 Supreme Court of Canada decision Michaels v. Red Deer College. Chief Justice Laskin in Michaels held that: