To rein in wrongful dismissal costs, tools such as salary continuance, clawbacks and reference letters can help, say two experts
Mitigation — the duty of dismissed employees to look for new work — is surfacing more frequently as a headache for HR and employers, with recent case law highlighting just how high the bar is for organizations and how low it can be for workers.
In one recent case, an employee was awarded over $300,000 in lost wages, largely due to the employer’s failure to provide evidence of his lack of mitigation.
In another, an employee who rejected an offer of employment from an acquiring company did not fail to mitigate his damages, according to the court, and was awarded 12 months of notice at common law.
“Employees have a very low bar threshold to meet when they're proving that they have mitigated or tried to mitigate properly,” says Carolyn Denault, an associate at McCarthy Tétrault.
By contrast, “employers are expected to come to trial with a full record of jobs that the employee could have applied for and full evidence as to why they didn't mitigate properly.”
If an employee is entitled to reasonable notice under the common law, they also have a duty to mitigate their damages, which means they must take reasonable steps to find comparable employment. If not, the entitlement may be reduced.
But one of the big reasons why mitigation is a challenging area is the basic principle in employment law recognizing the imbalance of...
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