Court of Appeal confirms that every dollar earned in a new job must be deducted from wrongful dismissal damages
When dealing with wrongful dismissal claims, navigating the duty to mitigate can sometimes feel like a bumpy ride. Just when you think you understand the rules of the road, a court decision comes along and forces everyone to hit the brakes.
Thankfully, a recent decision from the Court of Appeal has cleared up a lingering debate about whether income from a lesser job actually counts towards an employee's mitigation earnings.
The court’s decision confirms that every dollar of employment income earned during an employee’s notice period is deducted from any notice award, bringing case law back in line with fundamental legal principles.
The duty to mitigate requires an employee who has been wrongfully dismissed to make reasonable efforts to reduce their lost employment income by finding comparable work. Employees are not expected to make the job hunt their full-time occupation, nor are they expected to accept just any job; a lab technician, for example, is not required to accept a position as a bartender.
The rule, however, is that once an employee does accept a new job, whether it is comparable or not, every dollar they earn during their notice period gets deducted from their final notice award.
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