Definitions: Duty to Mitigate
A wrongfully dismissed employee generally has a duty to make reasonable efforts to search for, and accept, similar new employment opportunities. This is commonly referred to as the employee’s ‘duty to mitigate‘ their losses resulting from the wrongful dismissal.
While the employer may be liable for losses resulting from a wrongful dismissal, they are not responsible for losses that could have reasonably been avoided by the employee. An employee who fails to make reasonable efforts to search for new employment can find their wrongful dismissal claim reduced by the amount that they could have earned from similar new employment.
A wrongfully dismissed employee’s duty is to make reasonable efforts to locate new employment. The BC Court of Appeal has described the employee’s duty to mitigate as follows:1
The duty to “act reasonably”, in seeking and accepting alternate employment, cannot be a duty to take such steps as will reduce the claim against the defaulting former employer, but must be a duty to take such steps as a reasonable person in the dismissed employee’s position would take in his own interests—to maintain his income and his position in his industry, trade or profession
The onus is on the employer to establish that an employee has failed to mitigate. The employer must establish not just that the employee failed to make reasonable efforts to find work, but also that work could have been found if reasonable efforts had been made.2
In some cases, a wrongfully dismissed employee may even be expected to mitigate their losses by accepting re-employment with their previous employer (in the rare case where an offer of re-employment is made).3 As explained by the BC Court of Appeal, however, it is not always reasonable to expect an employee to return to work with the same employer:4
Sometimes it is clear from the circumstances that any further relationship between the employer and the employee is over…The employee is not obliged to mitigate by working in an atmosphere of hostility, embarrassment, or humiliation…There must be a situation of mutual understanding and respect, and a situation where neither the employer nor the employee is likely to put the others’ interests in jeopardy.