The Duty to Mitigate After a Termination in Ontario
If you are dismissed without cause, the common law expects you to make reasonable efforts to find comparable work. This is called mitigation. It affects how much you can recover for the notice period, and it is easy to get wrong.
- Reasonable notice damages can be reduced by what you earned, or could reasonably have earned, in the notice period.
- The employer must show that you failed to make reasonable efforts. It is not enough to say you could have done more.
- Statutory ESA termination and severance pay are not reduced by new earnings.
- A written record of your job search is the best protection.
What mitigation means
Courts expect a dismissed employee to look for comparable work in good faith. That does not require you to take any job at all. It requires reasonable steps toward suitable employment, taking into account your experience, your field and the job market.
A reasonable job search
- Update your resume, register with job boards and tell your network you are available.
- Apply for suitable positions regularly and keep copies of the applications.
- Take reasonable interviews and follow up.
- Consider retraining or short-term work if it is realistic, and be ready to explain why you did not take a particular role.
What does not have to be accepted
- Work that is far below your experience, status or pay, without a good reason.
- A job that would cause real hardship, such as a long relocation.
- Returning to the same employer on materially worse terms is an exception: in some cases the court can expect you to consider it. Take advice before you decide.
How it affects the claim
If you find work, the amount you earn during the notice period can reduce the damages for reasonable notice. If you did not make reasonable efforts, the court can reduce the award by what you could have earned. The employer carries the burden of proving a failure to mitigate. ESA entitlements are different: the minimums you are owed under the Act are not reduced because you found another job.
Records to keep
- A simple spreadsheet: date, employer, role, how you applied, and result.
- Copies of job postings, applications, emails and interview invitations.
- Any offers you declined, and why.
- Records of income from new work, including contract work.
Common questions
What if I start my own business?
It can be reasonable in some cases, but courts look at whether it was a genuine effort to replace your income. Keep records and talk to someone before you commit.
Does mitigation apply to a settlement offer?
A settlement is a negotiation. Mitigation matters in assessing the value of a claim, so your job search is part of the discussion.
This guide is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.
Not sure where you stand? A licensed paralegal can look at your documents and tell you your options.
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