Employment Law Glossary
In order to determine whether an employee has abandoned the employment, the test is whether “viewing the circumstances objectively, would a reasonable person have understood from the employee’s words and actions, that he or she had abandoned the contract”?
A wrongfully dismissed employee has a duty to make reasonable efforts to reduce their losses by searching for similar new employment opportunities, commonly referred to as an employee’s ‘duty to mitigate’.
Failure to make reasonable search efforts can result in an employee’s wrongful dismissal claim being reduced by the amount that they could have earned from similar new employment.
Where an employee is guilty of serious misconduct or incompetence, the employer may dismiss the employee for ‘just cause’ (also commonly referred to as dismissal ‘for cause’). An employee dismissed for just cause is not generally entitled to any advance notice or pay in lieu of notice for the dismissal.
Compensation earned from replacement employment following a wrongful dismissal is referred to as mitigation income. In a wrongful dismissal action, the amount that an employer owes an employee will usually be reduced to reflect any mitigation income earned during the employee’s notice period.
If an employee is entitled to advance reasonable notice of dismissal, but does not receive proper notice of the dismissal, then the employee will instead usually be entitled to ‘pay in lieu of reasonable notice’ as compensation for the wrongful dismissal. Pay in lieu of reasonable notice is intended to compensate the employee for the salary and benefits that they would have received if they had been given proper reasonable notice.
In an employment relationship, it is implied that the employer has the right to terminate the employment contract without cause by providing reasonable notice of the dismissal. An employee’s right to reasonable notice of dismissal is primarily intended to provide the employee with a fair opportunity to locate new employment and arrange their affairs before their existing employment comes to an end.